July 5 (Bloomberg) -- Vacationers in New Jersey will have to head to the beaches instead of the casinos or state parks, which were closed after a stalemate over the state budget forced Governor Jon Corzine to send all non-essential workers home.

State parks and monuments are shuttered, as are race tracks and casinos, where government inspectors are required to monitor operations. Island Beach State Park, a 10-mile (16-kilometer) stretch of coastline near Barnegat, is the only part of New Jersey's 127 miles of beaches that isn't open.

The shutdown comes as millions of vacationers are set to spend part of their summer at the state's attractions. Economists say closing the casinos and parks will end up hurting the economy, which relies on tourism to generate about $32 billion a year. It also has caused confusion about what is open and what isn't throughout New Jersey, lawmakers said.

``It is important that information regarding the closing of parks and beaches is very clear; only state-operated beaches and parks are closed,'' Senator Nicholas Asselta, a Republican, said in a statement. ``Federal, county, municipal and private beaches and campgrounds are not affected by the shutdown.''

Corzine shut down state services including courts, motor- vehicle offices and the lottery on July 1, the first day of this fiscal year, after he and lawmakers failed to agree on a budget. He said he couldn't do anything with regards to the budget until the lawmakers presented him with one.

``My hands are tied,'' Corzine said today in a speech to the Legislature.

`Uncertainty'

Corzine has asked fellow Democrats in the state Assembly to accept a compromise plan from the Senate that would raise New Jersey's sales tax, using half of that revenue for the budget and half for reducing property taxes, the highest in the nation.

Assembly Democrats say the state, which has a $4.5 billion deficit, can balance its budget without a sales-tax increase and are crafting an alternative plan. Lawmakers are meeting under an executive order that requires them to be at the Statehouse every day until a budget is passed. Without one, the state government has no authority to spend money.

``The shutdown draws a lot of national attention to the state's budget problems and to the uncertainty that exists in the state,'' James Hughes, dean of Rutgers University's Edward Bloustein School of Planning and Public Policy, said in an interview. ``That does not make the state a favored place for corporate investment right now. That's going to have a long-term negative impact on New Jersey's economic competitiveness in the future.''

$16 Million a Day

About 45,000 state employees serving non-essential functions have been furloughed until the government can agree on a budget, and more than 15,000 employees of casinos and racetracks are off the job. Approximately 36,000 workers, including state police, prison guards and child-welfare employees, are considered essential and are working.

Atlantic City casinos say they may lose more than $16 million a day in gambling revenue, as July and August are typically their busiest months. In addition, Hughes said the state is losing about $1 million a day in casino tax revenue.

Feeling the Impact

Gambling revenue in Atlantic City, the second-largest gambling market after Las Vegas, was $5.02 billion last year, a record for the city, and generated $402 million in state taxes. The historic seaside resort had 35 million tourists in 2005, the most since the advent of casino gambling in 1978. Hotels, bars and restaurants remain open.

``We are definitely starting to feel the impact,'' said Trump Entertainment Chief Operating Officer Mark Juliano. Trump Entertainment owns Trump Marina, Trump Plaza and Trump Taj Mahal and expects to lose $3.5 million to $5 million in daily revenue as vacationers and day-trippers look elsewhere, Juliano said.

Closure of the state parks and other tourist destinations isn't expected to have a large impact on New Jersey's economy, according to Hughes.

``The casinos are the 800 pound gorilla,'' Hughes said.

Beachside towns haven't reported a decrease in tourism since the government shutdown, though local officials said they have received many calls inquiring whether the beaches are open.

``We've been getting tons of calls asking whether the budget is affecting the beaches -- if they're open, if the rides are open, if most of the shops are open,'' said Talia Burkhart of the Ocean City tourism board.

Ripple Effect

Mayor P. Kenneth Hershey of Seaside Heights said tourism in his town hasn't suffered, though he said nearby Island Beach State Park, has taken a blow. He said there have been no cars out to the tiny barrier island that sits between Barnegat Bay and the Atlantic Ocean.

``Business around there are really fuming,'' he said in an interview today.

Drew Berry, the chairman of McCarter & English, New Jersey's biggest law firm, said a prolonged shutdown also may hurt businesses that need to obtain state permits, such as Department of Environmental Protection certifications. With the amount of construction that is going on in New Jersey, ``developers are going to be majorly unhappy if this doesn't get fixed fairly soon,'' he said.

Ripple effects could also come into play if the shutdown lasts more than 10 days, he said. If individuals can't get their cars registered, Berry said, purchase decisions will be delayed.

To contact the reporter on this story: Willow Belden in New York at wbelden@bloomberg.net.

Last Updated: July 5, 2006 16:53 EDT