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Blagojevich, Leaders Meet on Holiday to Discuss Budget


Springfield, ILL. – Illinois Gov. Rod Blagojevich met with legislative leaders on the Memorial Day holiday to discuss how to pay for the budget that passed last week.

The governor says some new options for raising money were discussed, including raising taxes on casinos and natural gas bought outside Illinois.

The Republican leader in the Senate, Frank Watson, says the leaders appear a long way from a compromise.

The Democratic governor, seeking to fill a $5 billion budget deficit, has proposed ending sales tax exemptions on out-of-state natural gas and trucks, railroad cars and other "rolling stock." He also wants to raise taxes on riverboat casinos, in some cases to 70%.

"Our attitude is that a lot of this budget is going to balance on the backs of those people who create jobs for the working people of this state," said Senate Minority Leader Frank Watson, R-Greenville. "That's a valid issue and a concern we all ought to have - what are we going to do to the job-creation people of this state?"

Blagojevich said he and the four legislative leaders are discussing several options to address such concerns.

The casino taxes might be increased with the proviso they go back down when an unused 10th license goes into operation, he said Monday after a negotiating session that lasted almost three hours.

Another possibility, he said, is to charge the additional natural gas tax but exempt not-for-profit organizations - primarily Catholic schools in Chicago - and some businesses that use gas extensively.

The tax on rolling stock may be overhauled so that it affects interstate trucks passing through Illinois and not Illinois-based manufacturers or transportation companies, he said.

"I think the discussions are very productive, but they're not definitive yet," Blagojevich said.

Blagojevich defended his proposal, saying it eliminates a massive deficit without raising general taxes. He rejected criticism that it would hurt businesses and, indirectly, average Illinoisans.

"Real people, the hardworking people all over the state, are the ones we're looking out for. We're asking those who have been sort of part of the entrenched interests here in Springfield to sort of lead in the shared sacrifice," he said.

Lawmakers already have approved virtually all the spending plan for the coming fiscal year, largely following the blueprint Blagojevich proposed last month - with a little extra money for schools and prisons.

Now they must decide how to pay for all that spending.

Blagojevich recently ruled out expanding gambling as a source of new revenues, leaving lawmakers little choice but to work off the governor's budget plan.

That would mean closing tax loopholes, raising fees that businesses and some everyday Illinoisans pay for government services and dipping into special government funds set up for specific purposes, such as building roads. Lawmakers already have approved Blagojevich's plan to cut pension expenses by borrowing money at low interest rates.

Senate President Emil Jones, D-Chicago, said he is confident they will agree on a revenue plan in time for lawmakers to end their session by the end of the month. After that, it requires more votes to pass legislation, making it harder to reach compromises.

House Speaker Michael Madigan refused to discuss the situation. "I have no thoughts," the Chicago Democrat said.


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