New Jersey

NJ Shutdown Deadline Nearing as Lawmakers Fail to Pass Budget

New Jersey crept closer to the possibility of a state government shutdown on Thursday when the Legislature failed to pass a budget, and Republican Gov. Christie threw his support behind the Democratic Senate's plan — opposed by the Democratic Assembly speaker — to overhaul the state's largest health insurer.

Christie at a news conference embraced the Senate's plan to reform Horizon Blue Cross Blue Shield, saying for the first time in the run-up to Saturday's deadline that he would not sign the Democrats' $34.7 billion budget unless it included the Horizon legislation and his plan to reduce the pension's unfunded liability by transferring the lottery as an asset to the fund. That includes about $350 million in Democratic spending priorities.

This will be Christie's final budget after two terms. He cannot seek re-election.

The Horizon legislation is a major stumbling block, opposed by Democratic Assembly Speaker Vincent Prieto. On Thursday, Prieto failed in his effort to pass the budget, halting the vote when he got only 24 out of the necessary 41 votes needed.

The prospects of a state government shutdown changed after Thursday, with Christie going from saying earlier this week that he wasn't worried about a shutdown, to already pinning the blame on Prieto if a constitutionally required funding plan is not enacted. Later on Thursday he wrote a letter to his Cabinet telling them to prepare for a shutdown.

"(If) government closes it closes. To tell you the truth I think that what will happen is that government will close," Christie said when asked what would happen if he does not get the bills he's seeking. "(Prieto) is playing a very dangerous game here for reasons that I just can't begin to understand."

Prieto said if there's a shutdown blame lies at the feet of the lawmakers who opposed the budget, which was negotiated with the Senate and passed out of committee with Democratic support.

Prieto had only 24 votes of the 52-member Democratic caucus. He told reporters at a news conference that he would be willing to lose the speakership over the issue.

"I don't want to shut government (down). The people that did not vote for this that you know would vote for this those are the people that are the obstructionists," Prieto said.

Thursday's action saw Christie in the familiar role of partnering with Sweeney, with whom he worked to pass landmark pension reforms in his first term and that Christie went on to abandon in later budget crunches.

Sweeney on Thursday pushed through the passage of the Senate Horizon bill and called on the Assembly to approve it. He pointed out that Democratic nominee for governor Phil Murphy has called on lawmakers to delay considering the bill and floated the prospect that if Murphy wins in November he could undo the bill if it's so unappealing to some.

"Is it responsible? It's reality," Sweeney said.

The Senate and Assembly recessed on Thursday without approving a budget. They're expected to return to try again Friday.

Failure to enact a budget would lead to a government shutdown, affecting state parks and other nonessential services such as motor vehicle agencies.

In 2006, when the government shut down under Democratic Gov. Jon Corzine, road construction projects were required to wind down. Motor vehicle offices shuttered and about 45,000 state employees were furloughed. State courts were closed for anything but emergencies.

State-run parks, beaches and historic sites remained open through the July Fourth holiday but closed afterward.

Prieto said he negotiated in good faith and included legislation backed by Christie to transfer the lottery to the public pension. But he would not agree to the Horizon legislation, calling it a "bad bill" that could hurt the insurers' 3.8 million ratepayers. Christie said he's been clear since February that he wanted legislation dealing with Horizon which is the state's only nonprofit health service corporation.

Democratic Assemblyman Craig Coughlin, who has announced that he's seeking to challenge Prieto as speaker, was among the Democrats who failed to register a vote on Thursday. He told The Associated Press that he did not record a vote because he wants "certainty that the benefits that were in that budget for the people of New Jersey would be preserved and achieved."

Horizon has strongly fought back against the Christie proposal with an onslaught of lobbying. The nonprofit says using the surplus would lead to higher rates for its members.

The Senate approved a different version of Christie's initial proposal.

Rather than tapping directly into Horizon's surplus, it requires that Horizon set a range for its surplus. When the top limit is exceeded, then the excess cash would go toward programs to benefit the public and policyholders under the Senate bill.

Copyright AP - Associated Press
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