SPRINGFIELD - The cornerstone of Illinois' long-sought, multibillion- dollar statewide construction program might be illegal, the federal government suggested in a recent ruling.

Reacting to a plan by Indiana to privatize the Hoosier Lottery, the U.S. Department of Justice said states may contract with private management firms to operate their lotteries, but the state must maintain control over significant business decisions made by the lottery.

Illinois officials, who have struggled to find an agreement on how to pay for a road, bridge and school building program, are unsure if the opinion will scuttle the lottery lease idea.

In September, the Illinois House approved a lease plan aimed at generating $10 billion for a job-creating construction program after other funding ideas, such as an expansion of gambling, failed to gain traction in the legislature.

The measure is pending in the Senate, which earlier had approved a different privatization proposal.

If approved, the House plan initially would bring the state $6 billion, followed by $4 billion within the next two years. Some money would be set aside to replace money the lottery usually provides for schools.

Lucio Guerrero, a spokesman for Gov. Rod Blagojevich, said the Justice Department opinion was under review.

Guerrero suggested Sunday that Illinois' proposal is different than Indiana's, which could allow it to go forward despite the federal opinion.

"Suffice to say, we are reviewing and still consider it an option," Guerrero said.

A spokesman for House Speaker Michael Madigan said the federal opinion is a cause for concern, especially in light of the governor's numerous legal battles on other policy initiatives.

"We don't want to be embroiled in another costly lawsuit," Steve Brown said.

Brown added the federal decision could be used as a template to design a lottery lease plan that complies with federal law.

"It is certainly something that should be reviewed," Brown said.

Illinois and Indiana are among a handful of states investigating a lottery lease as a way to generate dollars for programs without raising taxes. Others include California, New Jersey, Colorado, Florida, Michigan, Texas and New York.

kurt.erickson@lee.net|789-0865