(Adds comments from Christie, details on shutdown)
By Elinor Comlay
ATLANTIC CITY, N.J., July 1 (Reuters) - A partial shutdown of New Jersey government services snarled traffic near the state's Atlantic shore resorts on Saturday, the first day of the July 4 holiday weekend, as troopers turned back beachgoers from a shuttered beach and other state parks.
The shutdown went into effect just after midnight on Saturday after legislators failed to pass a budget, stymied by a dispute over a plan to take money from the state’s biggest health insurance company.
Lawmakers were in the state capital, Trenton, on Saturday to work on resolving the standoff over the measure, pushed by Governor Chris Christie as way to help fund drug addiction services.
Despite the shutdown, state police, prisons, child welfare services, NJ Transit buses and trains, and other health and safety operations were still functioning, but other services such as motor vehicle inspections ground to a halt.
Christie, a Republican who has the lowest approval rating of any governor in New Jersey history, said he returned to his office at 9:30 a.m. ready to work. His family was at the governor’s residence at the state beach that had been closed to the public as a result of the shutdown.
At issue is a push by the governor to force the nonprofit insurer Horizon Blue Cross Blue Shield to spend some of its billions in reserves on public health services or return money to subscribers.
Christie said he would remove about $150 million in school funding and other items previously agreed with Democrats unless the Assembly passed the Horizon bill.
But Assembly Speaker Vincent Prieto and other Democrats say the Horizon bill, introduced only on Thursday, is “bad public policy.” Prieto blamed the governor for “holding the state budget hostage.”
Some Democrats in the Senate and Assembly have sided with Christie. An Assembly vote on the budget stalled late on Friday, as some Democrats abstained from voting, fearing Christie’s veto of important items without an agreement on the Horizon bill.
The governor, at a news conference on Saturday morning, repeatedly blamed Prieto for the impasse.
“If the Horizon bill comes in, I will sign the budget,” he said, adding that he was open to counteroffers. Christie said the plan to restructure Horizon was only recently presented because it had not occurred to him earlier. It has been vetted by legal advisors, he said, adding, “It’s about transparency and accountability ... and the potential for a fiscal play down the line.”
All 80 of the Assembly's seats are up for re-election in November, when New Jersey will also vote on a new governor to replace Christie, whose second and final term as governor is ending.
The new governor will inherit a gaping public pension shortfall, which has contributed to 11 credit downgrades during Christie's tenure. New Jersey's credit rating is now the second lowest in the United States, above only Illinois. (Editing by Frank McGurty and Jonathan Oatis)