TRENTON, N.J.- Legislators opposed to Governor Corzine’s proposal to raise the sales tax rejected a compromise sought by the governor yesterday and began devising their own budget plan, which might involve an income tax increase.

Mr. Corzine had hauled lawmakers in to work on the July Fourth holiday, imploring them to end a budget standoff that has shut down many government services, while Atlantic City casinos fought to keep from being dragged into the dispute.

Members of the state Assembly budget panel planned to spend the night crafting a new plan, Speaker Joseph Roberts Jr., said.

Yesterday’s special session came three days after Mr. Corzine started shutting down state government because lawmakers missed the July 1 constitutional deadline to approve a new budget. Without a budget, the government can’t spend money.

“Make no mistake, people are being hurt and unfortunately more will be hurt in the days ahead,” the governor told the lawmakers.

The state lottery, road construction, motor vehicle offices,vehicle inspection stations,and courts already have closed. More than half the state work force – 45,000 people – was ordered to stay home on Monday. Lost lottery ticket sales are costing the state $2.2 million per day, according to the state treasury.

If no deal is reached, state parks and historic sites will be closed today along with Atlantic City casinos, which are required to have state regulators on duty.

It would be the first time casinos have been forced to close since Resorts opened its doors in 1978 as New Jersey’s first casino-hotel. In the intervening years, they have always managed to keep the doors open, even if it meant shoveling snow, fortifying entrances with sand bags to protect against ocean waves or putting CEOs to work flipping burgers during labor strikes.

Casino operators, whose arguments were rejected by the state Supreme Court in one effort to avoid the budget crunch, lost in a lower court again yesterday after asking to avoid being shut down as a side effect of the state’s problems. An appeal was planned.

“It’s uncharted territory,” the president of the Casino Association of New Jersey, Joseph Corbo, said. “We’ll obviously try to control it as best we can under the circumstances.” Mr.Roberts said he asked Mr. Corzine to avoid a casino shutdown by declaring state regulators “essential” employees, or by allowing state police to monitor gambling.