Illinois leaders closer to agreeing on how to pay for spending

SPRINGFIELD, Ill. -- Gov. George Ryan and key lawmakers moved closer to erasing a $1.35 billion budget deficit Saturday and wrapping up their overtime legislative session.

Ryan and legislative leaders emerged from closed-door talks Saturday declaring a "loose" agreement on borrowing $750 million against future proceeds from a national tobacco lawsuit settlement.

"I'm not sure we've got a deal, but I feel very good about where we are," Ryan told reporters. "We're probably out of here tomorrow. ... Right now, I can't think of anything that might throw this off track."

Both the House and Senate adjourned Saturday evening and announced plans to return Sunday.

The General Assembly already has approved a plan to spend at least $53 billion, but still needs the money to pay for it. The budget would provide less money for schools and medical services to the poor and only a slight increase for prisons.

Legislators have considered a mix of possibilities: cigarette taxes, casino taxes, expanding gambling and blocking a tax break for businesses.

The most contentious proposal has been the tobacco measure, known as "securitization."

Three of the legislative caucuses have been willing to support the idea, but Senate Republicans objected. They argue it would be bad policy to build the state budget around a one-time source of cash.

Philip said Saturday afternoon that he was now willing to consider selling $1.5 billion in future lawsuit revenue for $750 million now.

That means the tentative pact is essentially the same as it was Thursday, said House Republican Leader Lee Daniels. GOP lawmakers were ready to help the Democrat-controlled House pass the necessary tax bills, he said.

"I think you'll find that they'll be satisfied with the fact that this will be a balanced budget," said Daniels, R-Elmhurst.

Retirement easier

In another sign of movement, lawmakers approved legislation that would make it easier for state employees to retire early. Removing higher-paid workers from the payroll is expected to save the state $64 million in the first year.

But the House voted 49-63 against raising taxes for casinos in Joliet, Aurora and Elgin. They also would have expanded to serve 1,600 gamblers each, up from the usual limit of 1,200. The measure was expected to generate about $200 million.

An alternative plan raising taxes on more casinos -- but omitting any expansion -- could be considered Sunday.

The dispute over tobacco funds kept lawmakers from finishing their work by Friday's deadline.

Now, any budget plan must be approved by three-fifths of lawmakers, rather than a simple majority. That raises the possibility of a long stalemate and expensive legislative wheeling and dealing.

Lawmakers did approve a spending plan, however -- one $270 million larger than Ryan proposed in an unprecedented Memorial Day budget address to a joint session of the legislature.