N.J. Heads Toward Government Shutdown as Lawmakers Delay Budget

(Bloomberg) -- New Jersey government was at risk of a shutdown as the Democratic-led Assembly and Governor Chris Christie deadlocked on his proposed $35.5 billion budget.

The lack of a fiscal 2018 spending plan would force the closing of motor-vehicle offices, state-run parks and courts after the new fiscal year begins Saturday. Essential services, including state police and welfare programs, would operate, as would New Jersey Transit commuter bus and rail. The most recent shutdown was during eight days in 2006, under Democrat Jon Corzine.

The sticking point now is legislation to tap $300 million of operating surplus annually from Horizon Blue Cross Blue Shield, the state’s biggest health insurer and manager of its Medicaid services. Horizon, a not-for-profit company, says its $2.5 billion surplus is an emergency cushion, while Christie says it’s excessive.

A bill pushed by Republican Christie, with bipartisan support in the Democratic-controlled state Senate, would use the funds to fight opiate addiction. Assembly Speaker Vincent Prieto, a Democrat from Secaucus, objected, saying the plan needed more study. Christie told reporters yesterday that he would use line-item veto power over Democrats’ budget priorities if they approve a spending plan and fail to send him the Horizon bill as well. The Assembly was scheduled to consider both bills Friday.

A shutdown almost certainly would be a negative for Christie, whose 15 percent approval rating is the lowest recorded for a U.S. governor in more than 20 years of Quinnipiac University polling. The governor, though, is term-limited, and he will be out of office in January after eight years. Prieto and Democrats who support him risk voter backlash in November elections, when the governor’s office and all 120 legislative seats are open.

To contact the reporter on this story: Elise Young in Trenton at eyoung30@bloomberg.net.

To contact the editors responsible for this story: Michael Shepard at mshepard7@bloomberg.net, John Voskuhl, Larry Liebert