Top News

CBS 2's Mike Flannery and the Associated Press contributed to this report.
SPRINGFIELD, Ill. (CBS) ― The hunt is on to find money to pay for public transit in Illinois. In the latest battle in Springfield, the odds are getting better for a new land-based casino near downtown Chicago.

The Senate narrowly approved 37-15 the deal worked out by Gov. Rod Blagojevich and top Senate leaders to create three new casinos, including one in Chicago, and allow existing casinos to expand to pay for a roughly $13 billion state construction program.

It now heads to the House, where leaders have rejected previous gambling expansion plans. Madigan spokesman Steve Brown said the House would review the plan but members traditionally haven't shown much support for "big gaming expansion."

The plan includes $300 million more for education, millions for school construction projects and a $200 million bailout for the Chicago area's struggling mass transit systems.

Senators complained that it was a poor solution to long-festering financial problems that would hurt the working poor with gambling expansion.

"You really have got us all blinded by the need to do a capital bill here today," said Sen. Martin Sandoval, D-Chicago.

Top Senate leaders and others responded that it was the best way available to provide money for long-overdue improvements to roads, bridges and schools.

"It is the only game in town right now," said Senate Minority Leader Frank Watson, R-Greenville.

Blagojevich challenged the House to approve the gambling plan while acknowledging its flaws. He called it "imperfect means to get to good ends."

The Senate approved 58-0 legislation allowing the state to borrow billions of dollars and use the money for the construction projects, with gambling proceeds paying off the debt. When federal money and other funds are included, the total program amounts to about $25 billion.

Senate leaders also shelved another plan to aid Chicago mass transit through increased sales and real estate taxes in the region that Blagojevich and others oppose.

Some lawmakers considered the vote a big breakthrough for capital projects, which have been tied up in political bickering since the governor took office in 2003. Republicans ultimately decided to give the package the votes it needed to pass after getting assurances in detailed memorandums of understanding with Blagojevich's office that their members would receive the projects they were promised.

Despite the proposal's advancement, the casino-transportation mix is anything but settled.

Senators went home after Tuesday night's votes, and both the House and Senate are not scheduled to meet back at the Capitol until October for their fall veto session.

Leaders acknowledged that the proposal likely wouldn't be the final version of any capital plan but should put pressure on the House to act, with organized labor and business pushing hard for new projects that haven't been approved for several years.

Senate Majority Leader Debbie Halvorson, D-Crete, said the proposal could spur negotiations with the House on millions of dollars in budget cuts Blagojevich made last month that have drawn the ire of many lawmakers.

The Regional Transportation Authority, which oversees mass transit in the Chicago area, said it hasn't taken a position yet on whether it supports the Senate's version of a mass transit bailout.

One potential problem is that the Senate plan advances the transit systems $200 million that they would have to repay later. Under the plan to raise local taxes, the systems would simply be able to collect their money and not owe anything to the state.

Some Republicans questioned why the plan doesn't specifically detail how and when the systems, which have been criticized for financial mismanagement, must pay back the loan.

"That's an impressive leap of faith," said Sen. Dale Righter, R-Mattoon.

Blagojevich said officials must come up with a long-term solution to the transit systems' problems so they can repay the state money. His preferred solution, ending a variety of tax breaks for business, has little legislative support, but the Democratic governor said there are other options. He did not identify them.

Sen. Mike Jacobs, D-East Moline, said many lawmakers are concerned about using gambling to pay for construction projects. They also don't see the logic behind passing a plan that doesn't have support from House leaders, who have not been involved in recent talks.

"What we're doing here is running in place," Jacobs said. "I would be just as happy if we wouldn't do anything."

As CBS 2's Kristyn Hartman reports, a deal was reached last week in which funds from next year's state transit budget were used to account for a shortfall and avoid a harsh round of service cuts and fare hikes.

But that short-term bailout is not a cure-all.

CTA President Ron Huberman has said all along that the Chicago Transit Authority needs a longer-term funding mechanism, and has been asking for one. Since Gov. Rod Blagojevich's bailout includes borrowing on 2008 operating funds, transit officials warn it could make matters worse in the long run.

"Next year looks very, very severe for us; we're certainly just projecting out we'll mean at least a thousand layoffs next year and the quantity of service cuts – there's no way we can avoid impacting our rail system," Huberman said.

Daley on Monday criticized state legislators' efforts to date.

"It really hampers the growth of the City of Chicago, and the vision of the city of Chicago, and the commitment to improve the quality of life," Mayor Daley said. "Once that happens, then we can see what is happening in Springfield. Nothing is getting done down there. We all know that."

Springfield lawmakers are trying to hash out some kind of funding plan that is more permanent. If they do not, the signs posted at bus stops and inside buses warning of new fare structures and route eliminations may be posted again come November.

Previously, an increase in the state sales tax had been considered, but failed when brought to a vote. While Huberman and Daley have backed the sales tax hike, Gov. Blagojevich said he would veto it.

(© MMVII, CBS Broadcasting Inc. All Rights Reserved.)