Vol. 5, No. 6, June 2008
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Avoiding Another Shutdown
If legislators bungle the budget again, can these measures keep casinos open?
New Jersey is struggling to overcome another budget deficit. If the state shuts down again, as it did in 2006 when government failed to pass the budget on time, the casino industry will suffer anew from Trenton’s ineptitude.
By law, non-essential state services shut down when a budget is not adopted by July 1. Casino regulation is classified as non-essential. And every day that Trenton politicians spend arguing over the budget equals another day out of work for casino employees.
There are bills and constitutional amendments proposed to keep casinos open in the event of another government shutdown. Senate Bill 307, sponsored by Democrat Jim Whelan of Atlantic County, provides that if the state shuts down due to “failure to enact appropriation act (read: a budget), casinos will remain open and state police will replace Casino Control Commission inspectors.”
Whelan’s bill has several problems. Having state police regulate casino gaming invites a lawsuit, and having an essential agency assigned to a non-essential task circumvents the state constitution.
Two state agencies regulate gaming: the Division of Gaming Enforcement and the Casino Control Commission. The state police would have to be trained in casino regulation, at the cost of the taxpayers. Why create yet another state agency to duplicate existing services?
S307 grants discretionary power to Superintendent of State Police Colonel Rick Fuentes, who would determine if troopers can be spared to regulate casinos. In a budget impasse, casino gaming would be held hostage not only by the legislature and the governor, but by the superintendent as well.
Senate Bill 970, sponsored by first-term Democratic Senator Jeff Van Drew of Cape May, Atlantic and Cumberland counties, provides for the funding of casino regulation “when the annual appropriation act is not in effect.”
Van Drew’s solution—to make the Casino Control Fund independent of the state treasury—shows a high degree of legislative ingenuity. Assembly Bill 2410 provides that “in the event of emergency … casinos may remain open under certain conditions.” The measure allows casinos to regulate themselves if the government shuts down; this proposal enjoys bipartisan support.
The idea of self-regulation and personal corporate responsibility is remarkable coming from Trenton. Governor Corzine would have the ability to discipline any casino violating state regulations during a shutdown; all offenses would carry a fine 10 times more severe than usual. The governor would also have arbitrary power to close down a casino that violates state regulations.
Two constitutional amendments are also on the table. If passed by both the Senate and Assembly and signed by the governor, voters can vote on them in November. ACR155 provides for the continued operation of lotteries, casinos and horse racing in the event of a shutdown. A constitutional amendment eliminates the debate over essential and non-essential services; this amendment has enjoyed success by bringing together casino gaming, state lottery and horse racing interests.
ACR135 is straightforward. It would make casino regulatory agents essential employees. This simple amendment most directly solves the problem, keeping casinos open during the next state government shutdown.
But nothing becomes law in Trenton without the blessing of ranking Democrats. The best hope for this measure is for Senators Van Drew and Whelan to introduce a companion resolution.
