The truth, or not, about immigration
Cruising into July

Squeaky wheel gets the grease

In the case of New Jersey, though, it was a Roulette wheel.

Slot_machine_queen_2Atlantic City, the east coast's premier gambling destination was shut down after lawmakers failed to agree by July 1 on how to bridge the state's $4.5 billion budget gap. But coins should be jangling and slot levers rattling again any moment now.

So what in the heck happened? And why?

One of the first blogs to point out the Garden State's dire fiscal situation was Mauled Again, where Prof. Maule noted that state leaders needed to get a grip on the obvious:

"The amount collected (in taxes, fees, and other revenues) must equal expenditures. At the moment, expenditures exceed revenues. The solution is to raise taxes, cut expenditures, or do a little of both."

It took the proverbial worst case scenario, however, to get New Jersey legislators to realize that.

As the budget drop-dead date arrived and the long Fourth of July weekend was getting underway, Gov. Jon Corzine began closing down the state's offices. Soon there were no lottery ticket sales, no access to state beaches and 45,000 nonessential employees were furloughed.

Those workers told to take time off included the state's casino inspectors. And since they weren't on the job, all 12 betting parlors along the famed Boardwalk came to a standstill. It was the first mass closure in the 28-year history of Atlantic City's legalized gambling trade.

That got everyone's attention, and with good reason. Not only were 36,000 casino workers suddenly out of work, but the state was facing the loss of $1.3 million a day in taxes that the Atlantic City casinos send to the New Jersey treasury.

To get the Roulette wheel spinning again, New Jersey lawmakers agreed to bump the state's sales tax from 6 percent to 7 percent. The increase will cost the average New Jersey family about $275 a year. Overall, the tax hike will raise an estimated $1.1 billion, half of which will be used to lower property taxes if voters agree to a ballot initiative to that effect in November.

But odds are that the fallout from the fiscal crisis is far from over. As one disgruntled locked-out gambler told the New York Times, "Put a bet on No. 1 for a one-term governor."

Today's Tax Tip: Gambling taxes also are a boon to the federal government. If you hit the jackpot in Atlantic City, Las Vegas or even in your office's football pool, the IRS wants its cut. This story looks at how Lady Luck and Uncle Sam are related, and this one has more details on reporting your winnings and deducting your losses.

"Slot Machine Queen" painting by Shelly Wilkerson, courtesy of Tammy White Galleries.


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