Showdown or Shutdown: Will Dems Deliver on Deal Sweeney Cut with Christie?

In return for passing the Horizon and Lottery-transfer bills, the governor says he’ll sign the budget — and keep his veto pen to himself. Meanwhile, the budget-countdown clock keeps ticking

Senate President Steve Sweeney
Lawmakers are returning to Trenton today to try one last time to resolve a political stalemate that is holding up passage of the next state budget, splitting Democrats in the State House and threatening the position of Assembly Speaker Vince Prieto. If not resolved today, it will trigger the first state government shutdown in over a decade, meaning state parks and beaches will be closed over the long July 4th weekend.

The dispute centers around Gov. Chris Christie’s insistence that Democratic legislative leaders send him two pieces of legislation, along with a $34.7 billion spending plan that Democrats moved out of committees earlier this week.

One of the bills that Christie is demanding is a controversial measure that would overhaul how the state regulates Horizon Blue Cross Blue Shield, New Jersey’s largest health insurer. But Prieto (D-Hudson) is adamantly opposed to that bill, and has so far refused to give in to the Republican governor’s demands.

Both Christie and Prieto dug in yesterday, with each claiming in hastily called news conferences that any shutdown would be caused by the other side.

Playing the lottery

Those events capped an unusual day in Trenton that also saw the Senate pass both the Horizon bill and a measure that would transfer the state Lottery into the troubled public-employee pension system, which is the other bill favored by Christie in recent budget talks.

The two bills are part of a deal that Senate President Steve Sweeney agreed to, in return for Christie’s promise not to take a red pen to many of the Democrat’s favored provisions in the state budget. Once both houses of the Legislature vote on a state budget, it returns to the governor’s desk for signing. Christie cannot add or move money around in a signed budget but he does have the power of the line-item veto. In his second year in office, Christie demonstrated he is not afraid to use it by slashing funds to many of the Democrats’ favored programs. The legislative leaders have largely cooperated with Christie every year since.

Sweeney shelved a scheduled vote on the fiscal year 2018 spending bill in the Senate yesterday even though a full debate was held. In the Assembly, Prieto also abandoned an attempt to pass the budget bill after it had already been put up for a vote that showed it was going to fail. It also became clear there was a rift between members of Prieto’s own caucus, who were unwilling to pass the budget without assurances that the Horizon bill would also be passed.

The midnight hour

Whether all of the differences can be worked out today before a midnight deadline for passage of a new budget that’s set in the state constitution remains to be seen. Lawmakers in the Assembly and Senate are scheduled to come in this afternoon to try one last time to find a resolution, but if the standoff cannot be resolved, a state government shutdown will be triggered after the stroke of midnight. Last night, Christie ordered his cabinet to begin drafting contingency plans for a shutdown, which would be the state’s first since former Gov. Jon Corzine closed the government in 2006 as a way to force lawmakers to pass a sales-tax hike.

The Horizon bill, sponsored by Sen. Joe Vitale (D-Middlesex), doesn’t directly impact the state budget, and Sweeney (D-Gloucester) has held it up as a compromise since it doesn’t make the more drastic changes that Christie initially called for during his budget address in February, including a raid on the insurer’s capital reserves. Senate Democrats are treating it as a face-saving measure for Christie, after a bitter months-long battle in which he has demanded Horizon turn over $300 million in reserves to fund his anti-addiction initiatives. The suggestion has been furiously opposed by Horizon, and has been met with disdain by both Republicans and Democrats (including a negative editorial in the Wall Street Journal).

Sweeney said Vitale’s bill is something Democrats should be able to live with in exchange for assurances from Christie that he would keep much of the $350 million in spending adjustments that Democrats want to make to his original budget proposal.

Those changes include adding $100 million in new aid to local schools, and $25 million to both pre-K and special-education funding. Another $31 million in school aid would be redistributed to districts that have been considered “underfunded” according to the state’s school-aid law, which is a key goal of Sweeney’s. The Democrats’ budget also adds funding for cancer research, legal assistance for the poor, prisoner reentry programs, and the Educational Opportunity Fund.

“It’s not about a victory for the governor,” Sweeney said yesterday during a news conference in the State House. “It’s about looking out for the people who are the most vulnerable in this state.”

But Prieto, during his own news conference, said Democrats should be voting for the budget on its own merits and refuse to give in to Christie’s demands that they also pass the Horizon bill. He characterized Vitale’s legislation as a “bad bill” and a “Christie tax” since it still opens the door to a possible raid on the insurer’s reserves.

Doing the right thing

“At the end of the day, we need to do what’s good for the people in the state of New Jersey,” Prieto said. He has expressed frustration that that the Horizon bill should be passed to please Christie, and pointed yesterday to Christie’s low 15 percent approval rating in the polls.

Prieto also faulted the bill impacting the pension and lottery systems, and said if the stalemate leads to a government shutdown it would be Christie’s fault for insisting those measures have to pass in tandem with the budget.

“School funding was the issue and everybody agreed,” Prieto said, referring to budget negotiations involving Christie and Sweeney that were held last week. “This was never about other things outside the budget.”

Threat to Prieto

But the rift between the Assembly Democrats could also end up threatening Prieto’s own position as leader of the Assembly. Last month, Assemblyman Craig Couglin (D-Middlesex) suggested he had enough votes to unseat Prieto, and there were whispers in the State House yesterday that one option lawmakers have before them today is to hold a vote to remove Prieto from his leadership post for someone else aligned with the Senate Democrats who would allow the Horizon and lottery-pension bills to be posted for votes.

Prieto dismissed that talk yesterday, but before the Assembly vote on the budget was taken down the board showed Assembly Majority Leader Lou Greenwald (D-Camden) and other influential Democrats like Assemblyman Jerry Green (D-Union) and Assemblyman Troy Singleton (D-Burlington) not casting votes at all.

Still, the budget won 24 votes from other Democrats in the caucus, including Assembly Conference Leader Shavonda Sumter (D-Passaic).

“We cannot continue to be distracted by the Horizon bill,” Sumter said. “There are real consequences for New Jersey’s citizens, especially for working class families if we do.”

“A government shut down will put residents out of work and cut off vital services for those in need,” she said. “This is unnecessary if we simply focus on doing what is right for New Jersey.”

But Christie, during his own news conference yesterday, put the blame for a potential shutdown squarely on Prieto and his supporters in the Assembly. He said Prieto is the only one right now who is blocking the bipartisan deal he’s reached with Sweeney on the budget and the Horizon and the Lottery-pension measures from taking effect before the constitutional deadline.

“This is now up to Speaker Prieto,” Christie said.

Christie, who has become deeply unpopular with New Jersey voters and is due to leave office early next year, also dismissed the notion that he’ll be blamed for a shutdown if one occurs. A shutdown would initially close things like state parks, but as the work week begins, it would also impact other services like the Motor Vehicle Commission and the Lottery.

“If need be we’ll be ready,” Christie said. “This is now up to the speaker.”