CHICAGO — Passage of a Chicago-area transit bailout and a new $25 billion state capital budget remained elusive yesterday after the Illinois House adjourned its second special session of the week amid ongoing legislative bickering. House Speaker Michael Madigan, D-Chicago, adjourned yesterday’s session called by Gov. Rod Blagojevich following the House’s rejection of transit bailout during a special session Wednesday that was called solely to allow for a vote on the plan.After caucus meetings and floor debate Wednesday, the House rejected, by a 57-to-53 vote, the proposal to divert about $400 million of gasoline taxes collected in the Chicago region from the state general fund to the local transit systems. A three-fifths majority of 71 votes, requiring both Democratic and Republican support, was necessary for passage.Although the plan has widespread support and was originally floated by House Republicans, they along with other downstate lawmakers refused to approve it without a capital budget bill also being on the table. Blagojevich called lawmakers back to work yesterday, adding a capital budget to the agenda. “The message from the Legislature is clear: members will not pass a solution for the mass transit without a capital infrastructure plan. We can’t afford any more delay. The Legislature must keep working until they pass legislation that keeps the CTA, Metra, and Pace running,” the Democratic governor said in a statement.The second special session was short-lived, however, as an agreement on a capital spending plan is still not final and Madigan told members he was unlikely to call them back to work until January, absent a deal on the capital budget or some other development. Madigan has said he prefers to deal with the two issues separately. Blagojevich had not yet decided whether to call lawmakers back for another session today by press time yesterday. A capital spending package has proven the sticking point among downstate and Republican lawmakers, and its absence would have precluded Senate approval for the transit bailout, even if the House had advanced the measure this week. Senate president Emil Jones, D-Chicago, said he lacked enough members from his caucus to call the bill this week but would next week if the House had acted. Jones said despite support in his chamber for the transit package, without a capital bill, passage is unlikely. “It would be very difficult for it to pass,” he said in a radio interview. “You still must pass a construction bill … they’ve [downstate lawmakers] got to have something to bring home.” The Senate several months ago passed a capital budget, but it languished in the House. Calling the capital budget the gorilla in the room, he said it’s now “sitting on Speaker Madigan’s lap.”The House’s rejection followed a groundswell of support for the latest transit bailout plan. The Regional Transportation Authority of Illinois originally pushed a proposal to raise the sales tax in the Chicago area and the tax on real estate transactions in the city to generate more than $400 million annually for operations. Madigan supported that plan, but the governor had vowed to veto any sales tax increase. Earlier in the week, the governor, Chicago Mayor Richard Daley, and Madigan endorsed the gasoline tax shift as a source for new transit funding despite the lack of a solid plan to replace the revenues that would be diverted from state coffers. Without a deal, the RTA’s Chicago Transit Authority is set Jan. 20 to implement fare increases and dramatic service cuts that are expected to have a long-term negative impact on ridership levels. The CTA’s federal grants are based in part on ridership, so a drastic drop could impact coverage on outstanding grant-backed bonds and funding for future capital projects. In addition to new annual revenues, the transit bill includes CTA pension reforms that authorize the issuance of $1.5 billion of pension obligation bonds to restructure a $1.3 billion unfunded pension liability and to begin funding on an actuarial basis an unfunded $1.1 billion health care liability.Meanwhile, negotiations over the capital plan are ongoing with the sticking point being the number of new casinos that would be permitted to raise the revenue needed to repay bonds. The bill approved by the Senate last fall and endorsed by the governor includes $8.32 billion of new general obligation borrowing and $1.97 billion of sales-tax backed borrowing. It totals $25 billion when local and federal matching funds are added.RTA officials said legislative action can’t wait until next year. “Without action before the end of the year, the Chicago Transit Authority, Metra, and Pace will be forced to impose drastic service cuts, fare increases, and layoffs starting in January, as well as defer maintenance projects, in order to close the 2008 budget shortfall. Additionally, the previously negotiated historic agreement to reform the CTA pension and retiree health care system will expire,” the RTA said in a statement.

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