CHICAGO - Gov. Jim Edgar of Illinois signed into law yesterday the remainder of the state's $28.4 billion fiscal 1993 all funds budget, but only after he had vetoed $30 million of appropriations, including funding for tax increment financing districts, to bring the budget into balance.

On Wednesday, the governor signed legislation for a one-year $1.4 billion Medicaid assessment program that was a key element of the budget passed by the Illinois General Assembly on July 2.

The legislature's entire appropriation of $12 million for tax increment financing districts in the state was vetoed by the governor, who had refused to appropriate money for the districts in the fiscal 1993 budget he proposed in April. Officials in the districts had requested $27 million in sales-tax revenues for the fiscal year that began July 1.

State officials had said Illinois was "broke" and could not afford to subsidize the districts in fiscal 1993. Members of the legislature, however, said the state should meet its obligation to the districts and passed the $12 million appropriation.

Local issuers of tax increment financing bonds and the head of the Illinois Tax Increment Association have said the lack of an appropriation would cause financial strains for issuers who would have to turn to other revenue sources to fill the gap from the state funds. They also contended that the lack of state money would "inevitably result in bond defaults."

Don Eslick, the executive director of the tax increment financing group, could not be reached for comment yesterday.

Under a 1986 state law, local governments that use incremental increases in their sales and property taxes to support tax increment financing bonds would also be eligible for incremental state sales-tax revenues from the districts.

In his veto message, Gov. Edgar said, "Cities gained $40 million more than last year in additional revenue sharing that should allow them to compensate for the TIF reduction."

The governor was referring to the additional share local governments will receive in fiscal 1993 from a two-year 10% income tax surcharge that went into effect in fiscal 1992. That year, local governments received about half of the money, and in fiscal 1993 they will receive about two-thirds of the money with the rest going to the state.

The governor's proposal to eliminate the local governments' share of the money and use all $237 million of the surcharge money to help balance the state budget was rejected by the legislature.

Gov. Edgar made the remaining $18 million for appropriation vetoes from state legislative and administration budgets and from various other programs. He said the cuts were necessary because the legislature included "fake cuts and other gimmicks" in the budget it passed.

"If we had the money, I would not have vetoed many of these appropriations. But we simply cannot afford them this year," the governor said in his message.

Spokesmen for legislative leaders did not return phone calls on whether an attempt will be made to override the funding for tax increment financing or other vetos.

In addition to rejecting the governor's plan to use temporary income tax surcharge money for the state, the legislature also turned down most of the governor's proposed tax and fee increases. Instead, lawmakers slashed more money from state programs, increased revenue estimates by $90 million, and incorporated a number of one-time revenue measures into the budget.

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