The Illinois House last week rejected the gaming expansion that would have provided funding for Gov. Rod Blagojevich's $34 billion statewide construction program.

"Under the current conditions that exist in Illinois government — the difficulty in all the parties working together — my view is that the proposal for the expansion of gaming today is a dead issue," House Speaker Michael Madigan said after the vote, according to press reports.

The Senate had approved the measure, but it failed to gather the necessary 71 votes in the House.

Blagojevich has said the state needs a capital program to boost the economy and create jobs, but he and lawmakers in the Democrat-controlled General Assembly can't agree on how to do it or how to pay for it.

The measure would have authorized three new casinos, including one in downtown Chicago. The measure also would have permitted existing casinos to expand and allowed slot machines at horse racing tracks.

Blagojevich had called for last week’s session to have the House vote on revenue measures to pay for the construction program and find more money to fix a state budget shortfall.

When that didn’t happen, the governor cut  $1.4 billion from the budget to balance it, removing some money for health care, education, social service programs and transportation.

Lawmakers have 15 days to reverse the cuts.

The House is scheduled to be back in session today, Wednesday and Thursday.