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Working nearly 44 hours past its scheduled adjournment, the Illinois legislature Saturday night approved a controversial plan to overhaul Chicago`s embattled public school system and went home for the summer.

The proposal creates an oversight authority appointed by the mayor and the governor, replaces the current Chicago Board of Education, gives parents significantly more power over their local schools and allows principals to hire some teachers based on merit.

The package, if signed by the governor, would not take effect until next July 1, a concession Democrats had to make to gain passage. It is a concession that leaves great potential for tampering when the General Assembly reconvenes Nov. 10.

But the package did not, as the four legislative leaders and Gov. James Thompson agreed Friday night, give the governor potential control of the interim authority or allow the oversight board to impound school board funds if it did not believe the mandated reforms were being implemented adequately. That proposal fell apart in the wee hours of Saturday, as the Chicago Teachers Union, black lawmakers and Mayor Eugene Sawyer denounced the agreement and started to pick off votes.

”We wanted to be with you, but we can`t be with you because you took an agreement that went just a little bit further than where you are now and you destroyed it, you ruined it,” an impassioned House Minority Leader Lee Daniels (R., Elmhurst) told Democrats during a two-hour debate on the bill.

As a result of the agreement falling apart and perhaps creating some lasting tensions between the legislature`s partisan leaders, the proposal was supported only by the 31 Democrats in the Senate.

In the House, where the measure was approved 68-37, Republicans Sam Panayotovich and Roger Mac-Auliffe of Chicago, Loleta Didrick-son of Flossmoor and David Harris of Arlington Heights supported the bill. Rep. James Keane

(D., Chicago), whose wife is a Chicago school principal, voted ”present”

on the issue.

According to high-ranking Republican sources, Thompson said he would use his amendatory veto powers to rewrite the bill, but House Speaker Michael Madigan (D., Chicago) and Sawyer aides warned him not to do so.

”The governor does have an amendatory veto available to him, but I think that the people of Chicago are sufficiently serious that the message will come to the governor and the legislature that this is a bill that we want to advance,” said Erwin France, special consultant to Sawyer.

The legislature closed its books on the spring session at 7:25 p.m. Saturday after completing action on the state`s $23.1 billion budget and approving a financial aid program to help 226 Illinois communities improve their municipal wastewater-treatment facilities.

Republicans called the school overhaul a sham designed to protect teachers` union patronage and did little, if anything, to improve education for Chicago`s 420,000 public school pupils.

”You`ve fooled the people, and you`ve failed the kids,” said Sen. Robert Kustra (R., Des Plaines), who wrote a proposal to break up the city`s massive school system into 20 autonomous districts.

The issue of control of the oversight authority was one of the last negotiated by Democrats and Republicans, and Republicans late Friday night believed that their demand for an seven-member authority-three appointed by the mayor, three by the governor and one jointly-would be in the final draft presented to the legislature.

France early Saturday labeled that proposal as an attempted power grab by Thompson and Republicans of a city school system dominated by minorities.

”If they want to control it, they should make that public pronouncement to everybody,” said Samuel Patch, the mayor`s director of intergovernmental affairs. ”Don`t hide. Make a public pronouncement: `We want to control the Chicago public school system.` ”

The months-long debate over the quality of the public schools boiled down to a bitter and divisive round of political brinksmanship between Sawyer and Thompson over who will control an oversight authority to ensure that the reforms are carried out.

In the end, it was a fight that Sawyer won, with the strong backing of black Chicago legislators, Madigan and Senate President Philip Rock (D., Oak Park).

Thompson and Senate Minority Leader James ”Pate” Philip (R., Wood Dale) accused the Democratic leaders of reneging on the agreement and indicated that the bipartisan trust that has developed in past years may dissipate.

”It is the worst thing he (Rock) has ever done since he`s been the president of the Senate, in my judgment,” Philip said. ”All of the deals are off as far as I am concerned. And why should I negotiate with him anymore?”

Republicans countered that the dumping of the original agreement occurred because it stripped the Chicago Teachers Union of some valued seniority protections for teachers and board employees.

”It didn`t allow the fox to keep a close enough eye on the chicken coop,” said State Sen. Bob Kustra (R., Des Plaines).

Kustra also took a well-aimed jab at Sen. Arthur Berman (D., Chicago), a chief architect of the reform plan and chairman of the Senate Education Committee who also has done legal work for the Chicago school board and teachers union.

”We don`t have any contracts with the Chicago Board of Education. We don`t do any legal work for the Chicago Teachers Union,” Kustra said during the Senate debate. ”We don`t want any of the goodies, the goodies that have been fought over for the last few weeks.”

Similar battles between Thompson and Chicago`s chief executives have erupted in past years over control of the boards governing McCormick Place and the 2-year-old Illinois Sports Facilities Authority.

In the other critical issue remaining in the spring session, lawmakers agreed to levy a new sales tax on photo-finishing equipment to help finance a revolving loan program to aid the suburban and Downstate communities that have missed a Friday deadline for launching significant improvements to their sewage-treatment programs.

The bill also restructures the state`s complicated sales-tax system and imposes a relatively uniform 6.25 percent sales tax statewide. In addition, up to $65 million in additional tax revenues would be raised for local governments and the wastewater-treatment program.

Chicago would receive about $13 million annually from the package, which the city could use to provide affordable housing to poor families. Black lawmakers for weeks have been seeking a way to win such a program from the General Assembly as one of their only victories of the session.

Blacks often were rebuffed as the white-dominated legislature passed such bills as a home-equity insurance program and mandatory auto insurance over their strident objections.

Despite the fireworks finish to the spring session, most lawmakers-and Thompson-said the session had been one of the most ”do-nothing” and boring sessions in recent memory.

This spring`s meeting of the General Assembly had been shadowed for three months by Thompson`s proposed income-tax increase, until the governor reluctantly threw in the towel a week ago. Thompson laid the blame for the lack of additional tax revenues, which he said were necessary for education and other human services, directly at Madigan`s feet.

”This was one of the most uneventful sessions I`ve ever particiapated in because the tax issue permeated everything and everybody waited for the hammer to drop,” said Sen. William Marovitz (D., Chicago). ”But when it didn`t, people were left with empty arms, empty hands and nowhere to go.”

Still, the final hours of the session, which like the 17 preceding sessions did not adjourn on time, were marked with normal end-of-session horse-trading.

Thompson, Lt. Gov. George Ryan and Madigan spent an hour Friday night swaying votes for a financial incentives plan designed to keep the Chicago White Sox playing in a planned new South Side stadium to replace the aged Comiskey Park, where the Sox have played since 1910. That proposal was adopted by only the barest number of necessary votes.

A Sawyer-sparked proposal to expand the Chicago Park District board by two members, expanding the freshman mayor`s powers just a few months before the February mayoral primary, was ratified by the House and Senate. The passage of the bill marked only half a victory for the mayor, who had sought to scrap the current five-member board and fill it with seven new

commissioners.

Suburban Republicans, however, came up empty in support for proposals by Du Page County Board Chairman Jack Kneupfer to allow the county to enact a 4- cent gasoline tax and to levy a quarter-cent sales tax to build museums, civic centers and a high-tech university.

The legislature, in its final actions Saturday, also put the finishing touches on a revised budget, which Democrats say is balanced with the nearly $11.2 billion available in the general revenue fund, a position strongly resisted by Robert Mandeville, the governor`s budget director.