New Jersey leaders agreed on a state budget Thursday following a six-day government shutdown that shuttered casinos and threw more than 80,000 people out of work, a high-ranking Statehouse official said.
"They'll be announcing the final elements later this afternoon," said the official, who spoke on condition of anonymity because Gov. Jon S. Corzine will announce the deal.
The agreement calls for using half the $1.1 billion to be raised by a sales tax increase to lower property taxes, and using all of the revenue for that purpose next year, a different high-ranking Statehouse official said, speaking on condition of anonymity.
The deal ends a six-day government shutdown that closed Atlantic City casinos, state parks, the lottery and dozens of different state services, including the work of casino inspectors required in the gambling halls for them to operate.
Harrah's Entertainment spokeswoman Alyce Parker said it wasn't clear how quickly casinos — which were ordered to stop taking bets as of 8 a.m. Wednesday — would resume operations.
"We understand an agreement is close. We encourage the governor's office and the Legislature to continue with their work and cross the finish line. We look forward to working with the Casino Control Commission on reopening our four casino floors in Atlantic City," she said.
On Wednesday, commission chief Linda Kassekert said it would take a matter of hours — not days — from the time a deal was reached until the casinos could be reopened.
Although Atlantic City's hotels remained open during the casino shutdown, as much as 50 percent of the room reservations have been cancelled, reports CBS News correspondent Sharyn Alfonsi.
The shutdown started when Democrat-controlled Legislature missed its July 1 constitutional deadline to pass a budget amid a fight with Corzine, also a Democrat, over his proposed sales tax boost.
Without a spending plan, Corzine ordered state offices shut down Saturday and all non-essential state government operations closed, and he furloughed more than half the state's employees. Only about 36,000 people in vital roles such as child welfare, state police and mental hospitals remained on the job, and they were working without pay.
Under the deal, the sales tax will increase from 6 percent to 7 percent. State assembly lawmakers had opposed the tax increase, estimated to cost the average New Jersey family $275 per year.
A key legislator, speaking on condition of anonymity, said the deal calls for asking voters in November to amend the state constitution to dedicate 50 percent of the sales tax increase revenue for property tax relief. Voters would be asked in November 2007 whether to dedicate all of the money earned through the increase for property tax relief.
Several lawmakers said it was possible budget committees would meet Thursday night to begin pushing the budget measure forward, but said that would most likely happen Friday morning since the bill has to be printed.
With no budget in effect, the state has been unable to pay its employees, which caused a ripple effect across New Jersey: About 45,000 state workers are off the job, including state gambling inspectors; without the gambling inspectors, Atlantic City's 12 casinos had to shut their doors Wednesday, putting 36,000 casino employees out of work.
By not opening, the 12 Atlantic City casinos were losing more than $16 million a day, and the state was losing an estimated $1.3 million a day in taxes the gambling halls normally generate.
What was Atlantic City's loss, though, was a boon for other casinos across the country.
"Las Vegas is laughing... I think it's a sad day for Atlantic City," casino mogul Donald Trump told the New York Post.
Connecticut's Indian reservation casinos were laughing, too. They're about the same distance from New York City as Atlantic City, and many gamblers went there instead.
Based on the number of telephone inquiries alone, Bob DeSalvo of Foxwoods told WCBS-AM's Fran Schneidau he expects a boost in business of about 10 percent.
"I would expect that we could pick up an additional three, four, five thousand visits per day," DeSalvo said. "On a busy summer day we typically do about 40,000 to 45,000."
Earlier Thursday, Senate Majority Leader Bernard F. Kenny said a potential deal started to come together after Assembly Democrats realized there wasn't enough support for an alternative budget plan they had offered Wednesday.
"Hopefully we'll get a budget passed this weekend," said Kenny, who was in meetings with the governor throughout the day.
He said that when the governor is confident there is support among lawmakers for the plan, Corzine may lift his order that shut down state government.
The governor's staff did not immediately know Thursday how quickly shuttered activities such as horse racing, casino gambling and the lottery would resume.
Dennis Drazin, who represents the New Jersey Thoroughbred Horsemen's Association, said he anticipated a quick restart at the Meadowlands and Monmouth Park race tracks.
"Certainly, we will be racing by Saturday," Drazin said. "We're hopeful something could happen tomorrow (Friday), depending on what time the (budget) votes are taken."
In a speech Thursday morning, Corzine told legislators the budget stalemate was "deplorable."
"The people of the state of New Jersey have every right to be angry," he said. "Let's put New Jerseyans back to work and let them go on with their everyday lives."
Hundreds of state workers and casino employees rallied outside the Statehouse on Thursday.
Bob Master, a director with a key state workers union, the Communications Workers of America, said their lawyer was meeting with administration officials and hopefully will learn when state workers can return to their jobs.
"We're anxious to get back to work," he said.