We've been seeing a lot of news reports lately that the governor thinks he can pass a massive $3-billion road-and-school-construction plan this year. But Senate Republican Leader Frank Watson is throwing some cold water on an article that jump-started much of this speculation.

The article suggested that a deal might be nearing on the $3-billion program. Watson was quoted as saying he could support funding it with a $175-million "windfall" from increased gasoline-sale-tax revenues as well as a tax hike on cigarettes.

But a spokesperson for the Senate GOP leader played down the comments. "He didn't say anything new," said Patty Schuh in an e-mail. "We've always been for [a capital program] but it's got to be done right."

Schuh also said that Watson's support for using the gasoline-sales-tax revenues is not new and noted that Watson said he'd look at increasing the cigarette tax last year. Senate President Emil Jones blocked that particular idea, and he hasn't indicated that he's changed his mind, which creates a big roadblock for Watson's idea. (Jones, a smoker, just underwent angioplasty surgery, so it's possible that he might look at things differently in the near future.)

Rumors have circulated about a possible capital deal for months. Last May, Governor Rod Blagojevich privately suggested holding a special legislative session to force the issue, but that plan was rejected by the two Democratic leaders, Jones and House Speaker Michael Madigan. Then, about September, more rumors flew about a possible special session, but those turned out to be false. Every few weeks since then, the rumor mill has sparked up with capital-program talk, including in the days before the fall veto session. All have been wrong.

The problem for Governor Blagojevich is that new borrowing requires a three-fifths majority in both legislative chambers. He can't pass anything without Republican support, and, for various reasons, they haven't been cooperating.

Democrats Jones and Madigan have already signed off on a capital-projects deal, but there is resistance to Watson's idea of using the increased sales-tax revenue to pay for it. The legislature's revenue-forecasting arm has pointed out that the increased consumer spending on gasoline could very well be offset by less spending on other things, which would offset the increased gasoline-sales-tax receipts. In other words, there's only so much money out there at any given time.

The political game is pretty obvious. Watson is under pressure from some Republicans to prevent Governor Blagojevich from winning any big new spending program before this year's election. "Starving" an administrator's budget is a tried and true political strategy, and the Republicans have tried to use it against Blagojevich whenever they could for the past couple of years.

The Senate Republicans have said they wouldn't back a new bonding program unless they received solid assurances that they wouldn't be cut out of the deal. The governor has a history of not keeping his word in Springfield, so they want a projects list and a solemn vow in advance.

If the governor agrees to a list of projects and the program passes, he'll be able to visit those construction sites throughout the campaign season. That "victory lap" would allow Blagojevich to rebut Republican claims that he is a woefully ineffective governor who can't get things done. If the program doesn't pass, Blagojevich and the Democrats could use that list against Senate Republican candidates and incumbents.

Good sources say that Watson is under increasing pressure from road-builders and other natural GOP constituents to support a capital plan. And at least some of his own members are feeling the same heat, plus pressure from local constituents who want the jobs and benefits from road-, bridge-, and school-construction projects.

Watson worked hard last year to pry the construction trade unions away from the Democrats after Jones tried to strip away their control of apprenticeship programs and shift it to the state. If Watson continues to be seen as blocking a capital-projects bill, however, his move on the unions could be jeopardized.

Whatever happens, Watson doesn't want to publicly look responsible for killing a $3-billion projects plan. Whether he'll go the extra mile to get it passed is still unknown. The governor's people appear to believe they can convince Watson to come on board and are starting to gin up media reports that a deal is percolating. Stay tuned.

Rich Miller also publishes Capitol Fax, a daily political newsletter. He can be reached at (http://www.thecapitolfaxblog.com).

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