IIllinois Governor J.B. Pritzker signed Illinois’ fiscal year 2026 budget into law Monday, approving the largest spending plan in state history at $55.1 billion. The budget takes effect July 1st and is supported by $55.3 billion in projected revenue, including more than $700 million in new taxes and $544 million in one-time revenues.
Flanked by Democratic lawmakers in Chicago, Pritzker used the signing ceremony to defend difficult budget decisions, while criticizing President Donald Trump’s fiscal record, claiming Illinois is offering a better path forward.
“While the Trump administration goes on Fox News lying about being fiscally responsible, Illinois is showing a better way: Balancing the budget while maintaining the programs that most people rely on,” said Pritzker.
Highlights and Controversies:
Discretionary spending will increase by less than 1%, but the FY26 budget is still $2 billion larger than FY25.
The budget passed without Republican support; Democrats passed it with a narrow margin just before midnight on May 31.
GOP leaders blasted the reliance on fund sweeps, delayed transfers, and one-time revenues, calling it “short-term thinking.”
The governor trimmed $161.2 million from the legislature’s version due to technical corrections.
Key Revenue Measures:
The state will generate $709 million in new taxes, without raising broad-based income, corporate, or sales taxes:
$336M from increased taxes on out-of-state businesses.
$50M from increased taxes (45%) on tobacco and vape products.
$49M by raising the telecommunications tax from 7% to 8.65%.
$36M from a new tax on sports bets (25–50 cents per wager).
$10M from taxing short-term rentals like Vrbo (Airbnb already pays it).
$228M from tax amnesty programs.
One-Time Funding Sources:
$171M saved by pausing the final motor fuel tax transfer to the road fund.
$45M by suspending the monthly deposit into the rainy day fund.
Creation of a $100M “BRIDGE” emergency fund sourced from 57 swept funds.
Program Cuts and Expansions:
Eliminated: Health Benefits for Immigrant Adults (HBIA), saving $330M.
Retained: Health Benefits for Immigrant Seniors (HBIS) at $110M.
Other health and social spending:
$40M for Federally Qualified Health Centers.
$118M total for Medicaid managed care support at safety-net hospitals.
$60M for SNAP admin costs (up from $40M in FY25).
$263.7M for HOME Illinois homeless prevention (down $14.6M from FY25).
$25M for a Prescription Drug Affordability Fund.
$15M for a Medical Debt Relief Pilot.
$4M increase to DCFS for 100 new staff.
Wages:
80-cent/hour raise for direct service professionals (with 305 position cuts).
75-cent/hour raise for Illinois Dept. on Aging’s Community Care workers.
Education and Childcare:
$307M increase for K-12 schools under the evidence-based funding model.
$10M increase to MAP grants for low-income college students.
$8M for minority teacher scholarships.
$212M for Pritzker’s Smart Start early childhood program.
$21.7M for the new Department of Early Childhood.
$2.9M for Illinois’ Common App college initiative.
Child tax credit doubled from 20% to 40% of EITC.
State Operations and Projects:
5% legislative pay raise brings salaries to $98,304.
$75M Tier 2 reserve fund to comply with federal pension regulations.
$15.7M increase to the Attorney General’s Office (total funding remains flat).
$500M for the Surplus to Success Program to repurpose state properties.
$17.9M to modernize the state’s professional licensing system.
$40M for immigrant Welcoming Centers.
$6.2B for Department of Transportation construction, including $4.5B for roads and bridges.
Pritzker characterized the budget as “truly balanced with no gimmicks”, while Republicans continue to criticize its temporary fixes and tax hikes. With fiscal year 2026 set to begin July 1st, the coming months will reveal how sustainable the plan proves in practice.
Comments