SPRINGFIELD - Gov. Rod Blagojevich's $34 billion statewide construction program stalled again Thursday when the House rejected the gambling expansion that would have provided the major source of money to pay for it.

The 47-55 vote gives some political cover to Blagojevich's political nemesis, House Speaker Michael Madigan. The Democratic governor has feuded with Madigan and blamed him for holding up the capital program to rebuild roads, fix bridges, update schools and do other infrastructure work.

Now Madigan can use Thursday's vote in his defense.

"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," Madigan told reporters after the vote.

The Senate had already approved the measure, but it needed 71 votes in the House and didn't even come close. Madigan's House Democrats previously used a parliamentary move to block the gambling measure, effectively doing the same to the construction program.

House Republican leader Tom Cross said Thursday's vote in the Madigan-controlled chamber was a sham.

"Today is an exercise to get that monkey off your back," Cross said from the House floor.

Blagojevich's office blasted Madigan. "This is another example of the Speaker's shenanigans to thwart the capital bill," said spokesman Brian Williamsen, who accused Madigan of wanting to raise money by increasing the state income tax.

Madigan said Thursday he wouldn't back an income tax increase during the fall veto session, but he has supported them in the past and wouldn't rule it out for next spring.

Blagojevich ally Rep. Jay Hoffman, D-Carlinville, threw down the gauntlet for Madigan on the House floor over the capital plan.

"The fight is just beginning today to create jobs and economic development," he said.

The Democratic governor has said the state needs a capital program to prop up the economy and develop 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.

Madigan dangled hope that a construction program could still happen.

"I'm not prepared to say that it's dead," he said. It could happen, Madigan said, "if everybody would sit down and … bring some reality to what's being put together, it's possible."

Blagojevich has repeatedly criticized Madigan for not wanting to meet with him and sending a surrogate instead to leaders' meetings. Madigan has called meetings with the governor unproductive, a point he reemphasized Thursday.

"There's something about my presence in the room with the governor that just brings on a whole new personality from the governor. Clearly, not productive," Madigan said.

Cross said a capital bill needs to get done and he's ready to meet again with leaders to try to craft one and a funding plan for it that lawmakers can support.

Some lawmakers complained about fatal flaws in the legislation that failed Thursday. The measure would have authorized three new casinos, including one in downtown Chicago, but under terms Mayor Richard Daley doesn't like.

"These are the issues that could have and should have been worked out," said Democratic Rep. Julie Hamos of Evanston.

The measure also would have allowed existing casinos to expand and permit slot machines at horse racing tracks.

Lawmakers were in Springfield at the behest of Blagojevich, who wanted the House to vote on revenue measures to pay for the construction program and come up with more money to fix a state budget he said was $2 billion out of whack.

They didn't, so Blagojevich on Wednesday sliced $1.4 billion from the budget to balance it, cutting money for health care, education, social service programs and transportation.

Lawmakers have 15 days to reverse the cuts.

"Next week we will provide an opportunity for members of the House who wish to file motions to restore the reductions or the line items, and we'll take votes," Madigan said Thursday.

The House is scheduled to be back in session next Tuesday, Wednesday and Thursday. Senate President Emil Jones said his chamber has no plans to return.

Madigan says the House is ready to negotiate on fund sweeps, which takes money from bank accounts set aside for special purposes.

In addition to the $1.4 billion in cuts Blagojevich made, the governor's office says the administration expects to save more than $500 million through belt-tightening at state agencies.

The General Assembly on Thursday also fixed legislation that prompted Blagojevich to halt ongoing construction projects earlier this week.

The bill authorizes the governor to continue paying contractors on $30 million in projects that are under way. It also added $25 million for "emergencies" - including this week's failure of the air conditioning system at the Executive Mansion.

In all, 39 projects were halted, including a $160,000 emergency roof repair of Lincoln's historic former law office in Springfield and a $5.5 million heating and cooling upgrade for the Michael Bilandic state office building in Chicago.

The measure now goes to the governor.

Associated Press Political Writer John O'Connor contributed to this report.