SPRINGFIELD - With the whiff of a tax hike blowing in the winter air, a new General Assembly was sworn in Wednesday.

Although neither Senate President Emil Jones nor House Speaker Michael Madigan made outright demands for higher taxes to pay for schools and other state programs, neither one completely rejected the possibility of asking taxpayers to fork over more money for state programs.

"I'm prepared to engage in unpopular choices," said Madigan, who warned that the state is facing a huge backlog of unpaid bills.

Jones, D-Chicago, focused his Inaugural Day speech on school funding reform. He offered no specific plan, but told senators the current school funding system is "outrageous" and "inequitable."

The comments by the two powerful Democratic leaders set the stage for a rough and tumble spring legislative session. Democrats of the 95th General Assembly control the Senate with a veto-proof 37-22 majority, while the party has a 66-52 margin in the House.

Gov. Rod Blagojevich, a Democrat just entering his second term in office, has staunchly opposed tax increases.

State Rep. Frank Mautino, D-Spring Valley, predicted that the upcoming fights between the two leaders and Blagojevich would be grueling but fascinating to watch.

State Rep. Mike Boland, D-East Moline, said Democratic control of all aspects of state government represent a "golden opportunity" for major reforms - only if Madigan, Jones and Blagojevich can get along.

"If we can work together, we can get a lot of done," said Boland.

For Madigan, the focal point of the upcoming session will be the state's shaky finances. He said he's made tough choices in the past and is ready to make them again.

"I'm not going to be feint of heart," said Madigan.

Jones praised Blagojevich for boosting dollars for schools in his first term, but maintained more had to be done in Blagojevich's second.

In the past, Jones has supported tax "swap" ideas that would raise the state income tax and provide property tax relief in exchange.

On Wednesday, Jones said most options to raise money are on the table, including more Illinois casinos.

Blagojevich dodged reporters and did not answer questions before or after the swearing-in ceremony.

Jones expressed hope the governor might alter his campaign pledge to not raise income taxes, citing statistics that show wide gaps in how schools are funded based on their location in the state.

Central Illinois lawmakers said they plan to be a vocal minority when budget talks begin heating up.

"It all centers around the budget," said state Rep. Dan Brady, R-Bloomington. "And it's going to take some Republican votes to get that done."

State Rep. Dan Rutherford, R-Chenoa, added: "We need to maintain the loyal opposition."

State Sen. Bill Brady, R-Bloomington, said Republicans might benefit if Democrats can't get along.

"There is some infighting in the Democratic Party and with that there is some opportunity," Bill Brady said.

Blackwell Thomas contributed to this story