CHICAGO — Facing a crowded agenda and pressure to act on a Chicago transit bailout ahead of planned cuts and fare increases, Illinois lawmakers formally returned to work yesterday, with the House expected to approve two transit funding plans and the Senate acting on a bill to release $600 million in funding for public school districts.

First up, the Senate approved a budget-related bill that — once the House approves it — will clear the way for the release of nearly $600 million of operating aid for school districts after a months-long delay. An increase in state funding levels was included in the state’s $59 billion fiscal 2008 budget approved last summer but amid political bickering a companion budget implementation bill — necessary to actually release the funds — didn’t clear the General Assembly until early November.

Gov. Rod Blagojevich failed to act on the measure until last Friday when he used his amendatory veto powers to make two technical changes, sending the bill back to lawmakers to approve again. The House is expected to also soon approve it, ending a delay that has strained the budgets of many school districts.

In the House, lawmakers were expected to vote late on two separate transit plans. One would increase the sales tax paid in the Chicago region and the second would divert gasoline tax revenues collected in the Chicago area from the state’s general fund to its Regional Transportation Authority.

“We expect to take a vote and the speaker said he expects they will pass,” said Steve Brown, a spokesman for House Speaker Michael Madigan, D-Chicago.

It is unclear how the Senate will vote. Both plans would provide a few hundred million dollars more in revenues for transit annually. The governor is against the sales tax increase but supports the gasoline tax diversion. Some lawmakers have voiced concern with that plan however because of the hole it would leave in the state’s general fund.

Without additional funding, the Chicago Transit Authority is set to cut service and raise fares on Jan. 20. Also in jeopardy is a CTA agreement with its unions that includes various reforms and paves the way for $1.5 billion of borrowing to shore up the authority’s $1.3 billion unfunded pension liability and to establish a trust to fund its $1.1 billion unfunded retiree health care liability.

Lawmakers also continue to negotiate a capital bill, the passage of which Senate Republicans and downstate Senate Democrats have said is needed for their support on the transit bailout. Lawmakers remain in dispute over how much to expand gaming in the state.

A $25 billion program that relies on about $10 billion of new general obligation and sales tax-backed borrowing would require at least three new casino licenses, including one in Chicago, to raise sufficient revenue. The House does not expect to vote on any gaming expansion bills this week.

Lawmakers, during a series of special sessions, could not agree on either a transit plan or a capital budget. During the special session, a three-fifths majority was required. During standard sessions, a simple majority would be needed on most bills, such as the transit plan, although new state bonding always requires three-fifths approval.

The governor also in the coming months will release a fiscal 2009 budget amid a clouded state tax revenue picture. The Commission on Government Forecasting and Accountability in a recent report noted the poor performance of corporate income taxes and sales taxes. State Comptroller Daniel Hynes said the state closed out 2007 with a record backlog of $1.7 billion of overdue bills, evidence of stress on the state’s cash flow.

Another item on lawmakers’ plates is a proposal by the Metropolitan Pier & Exposition Authority to restructure a portion of its outstanding $2.1 billion debt portfolio, pushing out payments on its $1.1 billion 2002 convention center expansion bond issue and authorizing new debt to finance an expansion of its hotel.


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