UPDATED 01/11/11 8:49 a.m.

SPRINGFIELD, Ill. (CBS) — The clock is ticking on Democrats’ tax hike in Springfield, and legislative leaders are now dialing back the proposal to win more votes before the deadline on Wednesday.

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As CBS 2’s Susanna Song reports, Illinois Democrats say the proposed tax hike wouldn’t be as high as originally planned.

The proposed income tax would now stand at 5 percent rather than 5.25 percent, or an increase of 66 percent rather than 75 percent. The business tax rate would climb to 7 percent instead of the 8.4 percent rate.

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It appears from the shift that lawmakers are searching for votes in a last-minute effort to fix the state’s budget deficit, which could hit an estimated $15 billion this year. The deficit is so large that the government is borrowing money to make its annual contribution to retirement systems and is months behind in paying bills.

Democratic leaders want to pass something before the current General Assembly formally ends Wednesday at noon. After that, they lose some of their Democratic majority as well as “lame duck” legislators who might be persuaded to support a tax increase as they leave office.

But opponents say there should not be a tax increase right away, and instead, the new legislature should examine the state budget and chop away any unnecessary spending first.

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Talks on the tax hike plan continued at the state Capitol even as the inaugural ball began at the Prairie Capital Convention Center on Monday evening.

CBS 2 Chief Correspondent Jay Levine was in Springfield Monday for the inauguration of Gov. Pat Quinn for his first full term.

He caught up with state House Speaker Mike Madigan (D-Chicago), who came out of the governor’s office after a lengthy meeting, and asked if reducing the tax hike from 5.25 percent to 5 percent would be enough to win over those who are against the plan.

“There are a lot of moving parts, so that’s just one thing,” Madigan said.

Still, early morning customers at the Golden Apple Diner, 2971 N. Lincoln Ave., some customers said the tax hike was simply necessary.

“We live in this state. I think we should do as much as we can to support the state, and if it has to raise from 3 to 5 percent, I guess we just have to trust the decisions of the people that we voted for,” said Rick Quinn.

CBS 2 Chief Correspondent Jay Levine expects no action on the tax hike bill until late in the afternoon. Lawmakers must first write a new bill, then convince members to support it.

Lawmakers expect to be working into the night on the bill.

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Lawmakers are also looking at a dollar-a-pack increase in cigarette taxes, more than double the current rate.