State Government Goes Dark

Lights out in Trenton as frustrated horse-trading can’t break the deadlock over state budget, leading to first government shutdown in more than a decade

Assembly Speaker Vincent Prieto
Update: Saturday at the Statehouse brought three press conferences, one gubernatorial speech about the state of the Senate, lots of impassioned words, but no real progress on ending the budget stalemate. Gov. Chris Christie has called for another special session this afternoon. NJ Spotlight will have the full story on Monday.

Working against a midnight deadline, lawmakers negotiated into the night, hoping to dislodge a budget deadlock and prevent the state government from shutting down at 12:01 a.m. July 1. They didn’t make it. And while they plan to be at it again this morning, there’s no sense that the impasse can be overcome.

The shutdown means state parks, beaches, and a host of other services will be closed to the public. The casinos and New Jersey Transit will be operating, according to an executive order issued by Gov. Chris Christie just before the shutdown went into effect.

The closure of the government is required by the state constitution when a new spending plan isn’t in place when the fiscal year begins on July 1, effectively barring the Treasury from expending any money.

While the lack of a budget caused the shutdown, the stalemate is also being influenced by a separate bill that would overhaul how the state regulates Horizon Blue Cross Blue Shield, New Jersey’s largest health insurer. Christie, who is in his final months in office, has insisted that the Horizon bill be passed along with the budget.

Whirlwind activity

The shutdown capped off a whirlwind day in Trenton that included Christie calling a late afternoon meeting with Assembly Speaker Vince Prieto (D-Hudson), Senate President Stephen Sweeney (D-Gloucester), and other key lawmakers, only to emerge with no agreement or even indications that either side was giving much ground. While Christie has insisted that a Horizon bill come with the budget, Prieto has been just as firm that the bill, introduced just a week ago, is not tied to the budget and should be looked at more deliberately. He’s also raised concerns about regulatory changes that would be made in the bill, which opens the door to a possible state raid of the insurer’s reserves.

But many members of Prieto’s own party support the Horizon measure, and they refused to vote for a $34.7 billion spending plan sponsored by the majority Democrats even as the midnight deadline neared. The budget bill was also held back in the Senate, where Sweeney has cut a deal with Christie over school funding that will only be triggered if the Horizon bill is passed.

Christie, while issuing the executive order declaring the shutdown, said Prieto “needlessly stalled the budget process.” Earlier in the day, he said during a news conference that most legislative leaders were willing to negotiate amendments to the Horizon bill. But Prieto, Christie said, remained dug in, and the governor said he was also unwilling to relinquish his demand that Horizon legislation be passed with the budget bill.

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

Finger pointing

Sweeney spoke to reporters a few hours later, once it became clear that the Assembly would not be able to pass the budget, and he also pointed the finger at Prieto. The vote in the Assembly remained stuck all evening at 26 to 25, with 24 abstentions. It will take at least 41 votes for the fiscal year 2018 budget to advance out of the Assembly.

Senate President Stephen Sweeney
“I would love to be able to come to a compromise,” Sweeney said. “We were looking to find a compromise, (but) the speaker has made his position clear.”

“I don’t agree with it, but again, that’s his position and I have my own,” he said.

But Prieto, speaking to reporters after the budget deadline passed, said he had already compromised with Sweeney on the school-funding issue, and with Christie on a separate bill the governor has pressed for in budget talks that would transfer the state Lottery into the troubled public-employee pension system.

“I’ve been the one who’s been trying to negotiate,” Prieto said. “He’s holding the budget ransom with these 24 members.”

Rise and shine

In addition to the shutdown order, Christie also issued another order calling for a special session of the Legislature to be held today at 11 a.m. to discuss the budget impasse. Sweeney had already directed his members to return to the State House at that time as the Senate technically remains in a recess. In the Assembly, Prieto said his house was also still in session, though he said he would give members two-hours of notice for when they should return.

The last shutdown of state government occurred in 2006 when then-Gov. Jon Corzine could not reach an agreement with the Democratic-controlled Legislature over a proposed sales-tax increase. That impasse lasted a week, with the sales-tax hike eventually being adopted.