One-month budget sent to Illinois governor

CHICAGO (Reuters) - A temporary spending plan to keep Illinois' government running through the end of July passed the state Senate on Friday, sending the measure to Gov. Rod Blagojevich.

The bill, which passed the House on Wednesday, will allow the state to continue to pay its bills and make bond payments when the new fiscal year begins on Sunday.

"This one-month budget comes as a result of negotiations between the governor and legislative leaders to ensure the state's needs are met while negotiations continue in July," said Justin DeJong, a spokesman for the governor's office of management and budget.

Leaders of the Democrat-controlled General Assembly and Blagojevich, also a Democrat, have been at odds over a full-year fiscal 2008 budget.

The House in May rejected the revenue centerpiece of the governor's proposed $49 billion, all-funds operating budget -- a gross receipts tax on business that would raise $7.6 billion a year. The House then passed a limited-growth budget that the Senate rejected via a resolution. Failure to enact a budget by a May 31 deadline sent deliberations into overtime.

That gave minority Republicans more of a say in budget negotiations as a three-fifths majority vote was required in both chambers for budget passage.

Blagojevich wanted the money from the new business tax, which would replace the current corporate income tax, for expanded health care, an education funding boost and a capital program.

The governor also proposed easing the state's unfunded pension liability by raising $10 billion from a lease of the state lottery and the issuance of $16 billion of taxable pension bonds.