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Quinn proposed the tax increase last week as part of a Medicaid reform plan that also calls for $2 billion in cuts, such as eliminating a discount prescription program for seniors, kicking thousands of people off the insurance rolls and slashing reimbursement rates to doctors and hospitals that provide care. Without the $700 million the cigarette tax hike is expected to generate, Quinn said reimbursement rates would have to be cut further than he initially proposed. Otherwise, the governor said he'd be forced to look at cuts in other areas, such as education spending.

"That's the real difficulty," Quinn said Tuesday. "We have in our plan, 75 percent of it is cuts, reductions, efficiencies. I think that that's about the limit given the circumstances. But we if don't succeed in the area of raising the price of cigarettes, then there will be pressure on cutting reimbursements or, perish the thought, trying to reduce education. I think that would be a very bad way to go."

The governor said lawmakers in the House must follow their counterparts in the Senate, who have twice recently voted for a cigarette tax increase. Quinn's comments came following an appearance in Humboldt Park, where he attended the groundbreaking for an expansion of Erie Elementary Charter School. The state provided $12 million in funding for the construction project, which will allow the school to build a gym and expand classroom space in order to serve 400 more students from low-income families.

Quinn's plan calls for reimbursement rates for doctors, pharmacies and hospitals that treat Medciaid patients be cut by $675 million. That amounts to a roughly 8 percent cut for health care providers, many of which are waiting as long as six months to be paid be the state for services they've already provided. Hospitals, particularly those in poor or undeserved communities, are already warning that such cuts could force their doors to close. Deeper cuts would exacerbate the situation.

Also today, the governor also stood by his call for schools, community colleges and universities to pick up more of the tab for their workers' retirement costs, saying the state can no longer pay for the bulk of those retirement benefits. The proposal is part of his effort to reform the state's employee pension system, which also calls for workers to pay more for benefits and retire later.

On Monday, Senate Republican Leader Christine Radogno of Lemont suggested the funding shift to schools be separate from larger pension negotiations. Republican leaders say the idea could lead to a spike in local property taxes as schools try to cover the added costs, and fear the proposal could derail reform efforts this year. Quinn said he's willing to take some time to reach an agreement on the idea, but said Tuesday that it must happen sooner rather than later. Lawmakers are scheduled to wrap up their spring session on May 31.