New Jersey Budget Deal Poised to End Standoff Between Legislature and Gov. Chris Christie

By Kate King Features Dow Jones Newswires

New Jersey's government was poised to reopen Tuesday after Gov. Chris Christie reached a budget deal with Democratic lawmakers, ending a three-day closure that shut state parks, beaches, courts and many administrative offices during the Fourth of July weekend.

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The agreement, announced by New Jersey leaders late Monday night, ended a standoff between the governor and state legislature over demands by Mr. Christie for increased control over the state's largest insurer. Lawmakers missed Friday's deadline to approve a balanced budget, prompting the shutdown that furloughed more than 30,000 state workers on Monday.

The Republican governor, who faced an onslaught of criticism after he was photographed on a state beach that was closed to the public during the shutdown, received less than he initially sought with regard to the insurer, Horizon Blue Cross Blue Shield of New Jersey. But he hailed Monday's agreement as "overdue, significant reform" of the not-for-profit, which covers 3.8 million people, and said he would immediately move to reopen the government.

"I'm saddened that it's three days late, but I'll sign the budget tonight," Mr. Christie said at a late-night news conference in Trenton.

Democratic lawmakers, who had resisted Mr. Christie's proposed intervention into Horizon's finances and operations, cheered a budget that included more than $300 million in additional funding for schools, social services and educational programs. Assembly Speaker Vincent Prieto, a Democrat who had refused to put the bill demanded by Mr. Christie up for a vote, said the deal was palatable to all parties, including Horizon.

"Sometimes it gets to a point that when you're in a crisis, then people are more willing to be more reasonable," Mr. Prieto said. "At the end of the day, this budget has a lot of really great things in it, a lot of Democratic priorities."

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Mr. Christie had said he would use his line-item veto power to slash the additional spending from the state budget unless lawmakers approved legislation overhauling Horizon. The governor first targeted the insurer in his February budget address, when he called on it to provide funding for a new state addiction-treatment fund. When Horizon resisted, he proposed legislation that would give the state wide-ranging control over its finances while expanding transparency on executive and lobbyist pay and adding four new state-appointed members to its board.

Horizon had strongly opposed Mr. Christie's original proposals, which executives said would make the insurer less competitive and possibly force them to raise premiums.

The bill agreed to on Monday caps the insurer's reserves at 725% of risk-based capital with the understanding that excess funds will be used to benefit policyholders. The legislation also requires Horizon to publicly post detailed financial statements, including executive pay, and provides for the appointment of two new public board members.

Horizon Chief Executive Robert Marino, who met privately with lawmakers in Trenton on Monday, said in a statement that he supported the final deal.

"Horizon could only agree to legislation that is reasonable, avoids higher costs for our members, and that does not impose unfair or excessive obligations," he said.

Mr. Christie had sought to blame Mr. Prieto for the government closure, but it was the governor who faced the sharpest criticism after the Star-Ledger photographed him on Sunday sitting with family and friends on an otherwise empty beach at Island Beach State Park. The park, which houses a state-owned residence used by the governor, was closed to the public during the shutdown.

Mr. Christie's top deputy, Lt. Gov. Kim Guadagno, delivered her harshest criticism to date of her boss, saying in a Facebook post Monday that the photos were "beyond words" and calling for an end to the shutdown.

"If I were governor, I sure wouldn't be sitting on the beach if taxpayers didn't have access to state beaches," said Ms. Guadagno, who is running as the Republican nominee to succeed Mr. Christie.

The governor, who previously had told reporters he planned to spend the weekend at the closed park, pushed back against the criticism, saying he wouldn't apologize for spending time with his family.

"That's our residence, and we have a right to be there whenever we want to be there," he said. "I don't apologize for it, I don't back away from it, and I think my poll numbers show I don't care about political optics."

Mr. Christie, who is prevented by term limits from running for a third term, is scheduled to leave office in January.

Write to Kate King at Kate.King@wsj.com

(END) Dow Jones Newswires

July 04, 2017 01:18 ET (05:18 GMT)