SPRINGFIELD - The threatened meltdown of Chicago-area mass transit systems appears to have broken some of the gridlock that has handcuffed Springfield for months.

Unable to find common ground on key budget issues, state and federal officials agreed Friday to a temporary bailout of the train and bus systems that operate in the Chicago area.

That move paved the way for approval of money for more than 700 school districts that had been held hostage because of the partisan and regional bickering that has dominated the 2007 legislative session.

That spending measure also included cash to avert layoffs at the Illinois State Police and $1.3 million to subsidize passenger air service at airports in Marion and Decatur.

The proposal was approved by wide margins in both the Senate and House on Friday after Gov. Rod Blagojevich announced the transfer of $27 million to the Chicago-area bus and train systems, which were threatening to impose steep fare hikes and service cuts beginning Sunday.

Although the developments Friday were an encouraging sign in a year that has been marked by bitter fighting and gridlock, many rank-and-file lawmakers remained skeptical.

"There are still a lot of issues hanging out there," said state Rep. John Bradley, D-Marion.

State Sen. Mike Jacobs, D-East Moline, called himself a "born optimist" but said an agreement on a statewide construction program may be far from easy.

"But I'm also a realist," Jacobs said. "And I think we're still very far apart on how we're going to fund this project."

State Sen. Debbie Halvorson, D-Crete, said the House's acknowledgement that Chicago transit and a statewide construction plan are politically connected means that compromise is now possible.

"There is room for compromise," Halvorson said. "It's a shame that it took this long."

The next major hurdle for lawmakers will be the statewide construction program, which would mean billions of dollars for new roads, bridges, university facilities and schools.

Over the next week, House leaders said they plan to meet behind closed doors to find a funding source, which could include an expansion of gambling.

The program won't be patterned after a version approved in the Senate this summer, which would have added three casinos to the state's existing fleet of nine, as well as allowed Internet wagering at horse tracks.

That plan lacked support in the House, which just two years ago voted to abolish casino gambling altogether.

"We will start over," said House Minority Leader Tom Cross, R-Oswego.

Blagojevich signaled that there may be light at the end of the tunnel but also warned that tough negotiations remain on tap in the coming weeks.

"There's more work to do," the governor told reporters outside his office.

No date has been set for lawmakers to return to action.

Kurt Erickson can be reached at kurt.erickson@lee.net or 789-0865. Mike Riopell can be reached at mike.riopell@lee.net.