Governor relents on transit plan, if seniors can ride free

SPRINGFIELD -- Gov. Rod Blagojevich dropped his avowed opposition to higher sales taxes and said Thursday he will go along with a proposed mass transit bailout, but only if lawmakers agree to let senior citizens ride the buses and trains for free.

The deal would raise the sales tax across the suburbs by a quarter of a percentage point and increase the real estate transfer tax in Chicago, sending the added millions to the transit agencies. The sales tax increase adds 25 cents to a $100 purchase.

Blagojevich twice won elections vowing to never raise income or sales taxes and had repeatedly said he'd reject a bailout tied to sales taxes.

Faced with either breaking a campaign pledge or taking the blame for a transit meltdown come Jan. 20, Blagojevich backed off his election pledge and offered up the senior citizen perk to make the deal politically palatable.

"What I will do is essentially take what I believe to be a lemon and turn it into lemonade," Blagojevich told reporters.

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The maneuver could signal the end of months of contentious debate about whether the state should help Chicago-area bus and train agencies as a "doomsday" approached. If a state-backed bailout isn't in place by Jan. 20, transit officials say they'll raise fares, cut routes and lay off hundreds of employees to make ends meet.

The apparent breakthrough could also mean millions of new tax dollars for suburban government spending. The deal includes another quarter-point sales-tax increase for DuPage, Lake, Kane, McHenry and Will counties, which can spend the money only on transportation or public safety issues.

The combined sales tax increases would add 50 cents onto a $100 purchase.

The bailout barely made it to the governor's desk, falling a vote short in the state Senate late Wednesday only to be resurrected after supporters found a downstate Democrat willing to change his vote. The plan was approved Thursday without a vote to spare and quickly sent to the House where it also narrowly passed.

Supporters and transit officials were jubilant at the outcome, but the governor's addition of the senior citizen free pass means the entire plan goes back to the House and Senate for another round of votes.

"This is not over yet," warned state Rep. Julie Hamos, an Evanston Democrat and the bailout's House sponsor.

Exactly when that vote will occur is uncertain as lawmakers adjourned Thursday and aren't due back at the Capitol until next month, well after the "doomsday" deadline. Supporters said they expect a vote next week and the deal to be approved.

"Who would be against senior citizens riding for free?" said state Sen. Rickey Hendon, a Chicago Democrat who sponsored the transit bailout in the Senate.

RTA officials said the free senior rides would cost the agency about $15 million annually in lost fares, but welcomed the move if it ends the financial uncertainly.

"This is a great accomplishment," said RTA chairman Jim Riley. ''This should see us well into the future."

Asked if the buses and trains were ready for a flood of seniors, CTA president Ron Huberman said he welcomed every additional rider.

"We would love nothing more than to see seniors off the roads and on to transit," Huberman said.

If lawmakers go along with the governor's change, the bailout takes effect immediately. If they don't, the entire deal is dead. The plan doesn't have enough support to override the governor.

House Speaker Michael Madigan, a Chicago Democrat, questioned why the governor waited until now to bring up the senior perk. If he'd done it earlier, the entire deal could have been settled without the "additional razzle-dazzle," said spokesman Steve Brown.

Madigan and Blagojevich have increasingly been at odds over numerous state issues and policies, including the transit bailout.

After hearing of the governor's latest move, Brown said Madigan wanted to "congratulate the governor on breaking his campaign promise" not to raise income or sales taxes.

The deal

A quarter-percentage point sales tax increase across the suburbs and Cook County would bail out transit agencies. There's also a real estate transfer tax increase for Chicago.

The cost: 25 cents on a $100 purchase.

Done deal? Not yet. House and Senate must approve governor's stipulation of free bus and train rides for seniors.

Local focus: Suburban counties also get their own quarter-percentage point sales tax increase, but the money can be used only for transportation or public safety.

Ticking clock: Transit officials will cut routes, raise fares and lay off personnel if no deal by Jan. 20. Thursday was final day lawmakers were scheduled to be in session this month.

What's next: Will lawmakers take up the issue, again, next week?

Breaking away: Only Republicans backing proposal were three DuPage senators -- Dan Cronin, Kirk Dillard, John Millner.

Behind the scenes: The county sales tax provision was altered at the request of DuPage County Board Chairman Robert Schillerstrom.

-- Nick Shields and Amber Krosel