CHICAGO -- Six days into the 1995 fiscal year, Illinois remained without a budget yesterday with uncertain prospects for a reaching a compromise spending plan soon.

A negotiating session yesterday afternoon between Gov. Jim Edgar and legislative leaders produced an agreement to begin developing one or more compromise budgets today. The state's fiscal year began last Friday.

Mark Gordon, a spokesman for Senate President James Philip, R-Wood Dale, said the agreement marked "incremental progress."

"We're inching towards a resolution," Gordon said.

Steve Brown, a spokesman for House Speaker Michael Madigan, D-Chicago, said the opposing sides were only about $16 million apart in areas such as Medicaid bills and education. But, he said, no one knows when a final spending plan will be hammered out.

Last week, Edgar offered a revised $32 billion budget plan after Democratic leaders in the legislature turned down his original plan, which relied on a $1.5 billion debt restructuring and refinancing to pay off a backlog of Medicaid bills. The plan would have raised $1.4 billion over two years to pay the bills, while instituting reforms of the Medicaid system.

The revised budget proposal called for refinancing only up to $750 million of general obligation debt to produce a savings of $25 million, tapping $50 million in excess revenues in the Build Illinois bond reserve fund, making $65 million of budget cuts, and using $248 million in higher than anticipated state revenues to help pay the bills.

Of the $388 million that would be raised under the revised plan, the Republican governor allocated $328 million for Medicaid bills.

Late last week, the revised budget was passed by the Republican-controlled Senate, only to be defeated Tuesday in the Democrat-controlled House.

This year's overtime budget session marks the fourth in a row for Illinois, which has exceeded its midnight June 30 deadline to pass a budget every year since 1991. Because the General Assembly is in overtime, the budget needs a three-fifths majority of the legislature for passage. Early next week, the state faces its first payroll of the fiscal year.

Meanwhile, Chicago Mayor Richard Daley's proposed riverboat casinos project, which would be financed with up to $800 million of revenue bonds, appears to be sunk for the current legislative session.

Although the Daley Administration has tried in recent days to sweeten the proposal by resurrecting a $1 billion bonding plan for school backed with gaming revenues and offering some relief from state utility taxes for businesses, Senate Republicans are not budging.

Gordon said the Senate will not consider casinos for Chicago without a package of business reforms Philip proposed earlier this year. Democratic lawmakers have refused to consider the reforms, Gordon said.

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