PHOTO BRIAN CASSELLA/CHICAGO TRIBUNE/POOL
Gov. JB Pritzker delivers his Feb. 19 State of the State and finances handle earlier than the Common Meeting on the Illinois State Capitol
An improved income forecast helps ease stress on state funds as Gov. JB Pritzker requires tightened spending to stability the finances with out tax will increase on on a regular basis Illinoisans.
Throughout his annual state of the state and finances handle on Feb. 19, Pritzker referred to as for a roughly 3% spending improve to $55.2 billion in fiscal 12 months 2026 that will probably be supported by an identical improve in state income to $55.5 billion.
The plan components in a better-than-expected financial outlook for the approaching fiscal 12 months after the governor’s workplace initially projected a multi-billion-dollar shortfall in November. Pritzker additionally proposed a big spending discount in comparison with the November estimate whereas nonetheless rising spending over current-year ranges.
However administration officers additionally warned that the state is largely on the whim of President Donald Trump’s onslaught of federal coverage modifications.
The governor’s plan assumes a $173 million improve in federal funding, although Pritzker named a number of enacted or feared Trump insurance policies that would alter estimates, together with tariffs, meals security deregulation and potential well being care cuts.
The governor referred to as his proposal “accountable and balanced,” mentioning that it would not increase taxes on Illinoisans, although he did suggest a tax hike on sure on line casino income.
“If there’s one factor I’ve realized as governor, there are not any magic bean fixes,” Pritzker stated. “And every year there’s some problem that requires us to work arduous to beat it.”
In the end, lawmakers and the governor should come to an settlement on a spending plan by the tip of Could. However the governor’s opening salvo might meet opposition from Democratic lawmakers within the Common Meeting – particularly members of the Illinois Legislative Latino Caucus – as a consequence of what it would not fund.
“All of us have been listening to that it was going to be a troublesome finances 12 months. I feel that we anticipated there to be some issues within the finances that we weren’t going to be proud of,” Sen. Karina Villa, D-West Chicago, stated. “However I feel fully eradicating a program shouldn’t be something that we have been anticipating.”
Tightened spending
Regardless of the roughly 3% spending improve, most areas of the state finances would see little progress underneath Pritzker’s plan. About 75% of the spending improve comes from elevated funding for training, pensions and rising well being care prices. Outdoors these areas, spending is up simply 1% throughout the board.
Probably the most notable spending change is the elimination of the Well being Advantages for Immigrant Adults program that gives Medicaid-style advantages to sure low-income noncitizens ages 42 to 64. Pritzker proposed leaving the Well being Advantages for Immigrant Seniors program intact to serve sure low-income noncitizens age 65 and older, which is able to price the state $132 million.
The applications unexpectedly stretched the state finances in spring 2023 when prices have been projected to probably attain $1 billion. Lawmakers gave the governor authority to regulate prices by pausing enrollment and enacting copays, and projected program prices at the moment are at $558 million within the present fiscal 12 months. Enrollment within the applications, in the meantime, has remained paused.
Eliminating this system for middle-aged adults is projected to save lots of the overall income fund about $330 million, in response to the governor’s workplace. Pritzker instructed reporters he expects the federal authorities will cease reimbursing states for prices related to applications offering providers to noncitizens.
Whereas Pritzker signified he is open to working with lawmakers on what applications will finally be funded, he stated his overarching purpose is a balanced finances.
Well being care spending would see the most important improve through Pritzker’s plan, a $740 million improve from the present 12 months. Financial improvement is the one main class to see across-the-board cuts.
One of many priorities Pritzker put on maintain is a rise in spending on the state’s Early Childhood Block Grant program. Prior to now two years, the state has helped greater than 11,000 kids entry little one care as a part of a multiyear plan. However the governor didn’t request one other $75 million improve this 12 months that will have helped add extra.
Pritzker additionally proposed redirecting funds beforehand appropriated for asylum seekers to different providers. That features lowering funding to $40 million from $139 million for “welcoming facilities” that helped the state deal with migrants bused right here from Texas and different states.
Pritzker proposed allocating $282.7 million for Residence Illinois, a program that gives providers for the homeless and likewise offered help to new arrivals, holding this system comparatively flat from a 12 months in the past regardless of advocates’ requires $100 million in new funding. The governor’s workplace stated funds that have been beforehand directed towards asylum seekers in Residence Illinois can be redirected to homeless shelters and different providers for Illinois’ homeless populations.
Pritzker’s proposal requires allocating $2 million towards upkeep within the Division of Corrections, the minimal quantity advisable. The transfer comes a 12 months after the state allotted $900 million to rebuild the Stateville and Logan prisons after years of decay and behind-schedule repairs.
Pritzker additionally proposed rising the “wet day” fund by $154 million, bringing its stability to $2.5 billion on the finish of FY26.
Notably absent from the proposal, nevertheless, was any new funding for public transportation. Chicago-area transit businesses face a greater than $700 million shortfall within the coming 12 months. Pritzker instructed reporters there nonetheless must be negotiations with the businesses about reforms earlier than the state commits to new funding.
Schooling and human providers
One of many few areas of the finances focused for a considerable improve is PreK-12 training.
Pritzker’s plan contains the statutory minimal improve of $350 million for the Proof-Primarily based Funding formulation, a plan lawmakers enacted in 2017 to focus new training spending on the neediest districts.
That may carry the entire funding underneath the EBF formulation to $8.9 billion, a $2.1 billion cumulative improve because the program started. Pritzker credited that funding for serving to increase scholar check scores and enhancing commencement charges.
His plan additionally requires including $1.3 million for profession and technical training and sustaining spending of $3 million subsequent 12 months to implement the state literacy plan.
Nevertheless it additionally requires flat funding of $748 million for Early Childhood Block Grants, which assist subsidize the price of preschool for at-risk and low-income kids.
All instructed, Pritzker’s plan would carry complete common income fund spending on PreK-12 training to simply underneath $11.2 billion, or about $200 million lower than the Illinois State Board of Schooling had requested.
State Rep. Will Davis, D-Homewood, who chairs the Home appropriations committee that offers with public colleges, stated after the speech that he thought Pritzker’s plan was inadequate, “for the easy undeniable fact that I feel we will be higher at EBF.”
“Final 12 months, I needed to argue for $450 million,” he stated in an interview of the usual yearly improve in EBF funding. “I feel that is doable. I imply, if we’re ever going to have an actual dialog about attending to full funding in Ok-12, we will have to extend the EBF allocation greater than what it’s proper now.”
The governor can be persevering with his effort to extend the variety of staff on the Division of Youngsters and Household Providers. Pritzker proposed including 100 new staff to extend staffing to 4,100 on the division, essentially the most since 2002. Below his proposal, general funding for DCFS may have elevated by 100% since Pritzker took workplace.
The Division of Human Providers would obtain $7.9 billion, together with $20 million to fund 50-cent-per-hour wage will increase for direct service suppliers.
With a lot of the state’s federal pandemic reduction funds now spent, Pritzker proposed allocating some state funding to maintain up affected applications. That features appropriating $40 million from the state’s common fund to implement the Reimagine Public Security Act, a program designed to scale back gun violence.
Income modifications
The governor’s finances workplace sometimes makes conservative estimates about income. The November forecast from the Governor’s Workplace of Administration and Finances had projected revenues to stay flat, driving a deficit of $3.2 billion.
Nevertheless it relied on a September financial forecast from the monetary providers firm S&P International. The governor’s workplace says S&P has since revised its forecasts, main the GOMB to extend its estimate by $1.6 billion. Pritzker’s workplace additionally now expects robust private and company earnings tax progress subsequent 12 months along with restricted gross sales tax progress.
The income outlook for the present FY25 finances was additionally revised upwards by $421 million thanks to non-public earnings progress, shopper spending and a steady job market. The governor’s workplace plans to make use of the additional income to introduce $550 million in further spending for the present fiscal 12 months.
However Pritzker additionally proposed spending about $1.2 billion lower than what the GOMB projected in its November estimate.
Most of Pritzker’s proposed spending comes from training, human providers and well being care, however about 10.6% can be spent on pensions. One other 4% is allotted for debt service, required fund transfers and unspent appropriations.
One other $469 million in revenue can be raised by means of different modifications to regulation, together with adjusting tax charges on digital playing and desk video games at casinos to generate $100 million in income. The plan additionally requires pausing the switch of $171 million in gross sales tax collected on motor gasoline to the highway fund and elevating $198 million by offering short-term amnesty for people making delinquent tax funds.
However a lot uncertainty nonetheless surrounds how a lot federal funding Illinois will receiving going ahead because the Trump administration pledges to chop federal spending. “Solely an fool” would assume chopping off essential federal funding is a good suggestion, Pritzker stated.
His proposal nonetheless anticipates roughly the identical degree of federal help in FY26 because the state at the moment receives. Pritzker’s workplace careworn it is not possible to foretell what Trump’s administration will do, however they imagine the federal authorities should honor longstanding agreements.
State authorities efficiencies
Pritzker additionally emphasised making state authorities extra environment friendly to save lots of prices.
The governor introduced new web site readiness and surplus property applications which might be designed to spark financial improvement, which finally might additionally quantity to financial savings for the state. Pritzker proposed allocating $300 million to the Illinois Division of Central Administration to repurpose 5 shuttered state prisons and developmental facilities to finally appeal to new personal financial improvement on the websites.
“This proposed finances enacts cost-saving operational efficiencies, improves productiveness, curtails new hiring at businesses, consolidates pointless segregated funds, eliminates dormant boards and commissions, and overhauls state buying to save lots of taxpayers cash,” Pritzker stated.
This contains research of CMS and the Division of Transportation to establish higher hiring and contracting practices, merging the psychological well being and substance abuse divisions on the Division of Public Well being and reviewing probably overlapping tasks between townships and different items of presidency.
Capitol Information Illinois is a nonprofit, nonpartisan information service that distributes state authorities protection to a whole lot of stories shops statewide. It’s funded primarily by the Illinois Press Basis and the Robert R. McCormick Basis.
