GOVERNOR’S HIGHLIGHTS:
A joint session of the Illinois General Assembly convened on Wednesday to hear Governor Pritzker’s seventh Budget and State of the State address. Leading off the speech were highlights of the administration’s achievements to date: reducing more than $12 billion in debt; boosting the rainy-day fund to over $2 billion; improving the state’s pension-funded ratio; and receiving nine upgrades in the state’s credit ratings. The Governor also cited education, healthcare, public safety, infrastructure, and job creation as areas the state has made ongoing investments in. This budget proposal, said Pritzker, involves “hard sacrifices and moderated spending” and that there are “no magic bean fixes.” He warned that “if you come to the table looking to spend more – I’m going to ask you where you want to cut.”
The Governor also expressed grave concerns about the current political climate under the Trump administration. Pritzker — who is Jewish and was instrumental in the construction of the state’s Holocaust museum — drew parallels between the rapid rise of Nazism in Germany and the actions of President Trump and his supporters. Pritzker warned, “It took the Nazis one month, three weeks, two days, eight hours and 40 minutes to dismantle a constitutional republic. All I’m saying is when the five-alarm fire starts to burn, every good person better be ready to man a post with a bucket of water if you want to stop it from raging out of control.” These portions of the speech did not go unchallenged; following the speech, Republican Representative Jeff Kiecher rose on the floor to denounce the Governor’s remarks as offensive.
FY 26 Proposed Budget: In laying out his spending plan for FY26, Pritzker proposed an All Funds appropriation of $129.4 billion, including $53.9 billion in General Funds (this is an increase of $1.3 billion, or nearly 2.5% GRF, over FY 25 estimated spending). Note that the revised FY 25 estimated spending assumes Spring supplemental appropriations and transfers of $650 million. The spending plan being laid out for FY 26 has a $218 million budgetary surplus, with $154 million reserved in the Budget Stabilization Fund.
Of the FY26 spending increase, about 75% goes to four areas: the Evidenced Based Funding Formula ($350 million); base pension expenditures ($436 million); and medical expenditures at two agencies — HFS ($397 million) and CMS ($341 million). A number of other funding areas are considered priorities as well, including early childhood education and child care funding, higher education, health and human services, public safety and violence prevention, growing the economy and investing in the workforce, and environmental, natural, and cultural resources.
FY 26 Revenue Estimates: While previous projections placed the state in a $3.16 billion deficit position, the latest budget forecast offers a more encouraging figure, placing base revenues at about $1.5 billion higher than was expected in November. But caution is called for, the Governor advised, noting that despite the good news, significant economic uncertainty remains: “Our spending must reflect reality. We have to live within our means.”
Overall, the FY 26 budget assumes $55.3453 billion in general revenue, representing a $1.553 billion, or 2.9% increase from revised FY 25 estimates. An upgrade was seen in the revenue forecast for the current fiscal year. It has been revised to $53.9 billion, equating to a $421 million increase from last November’s forecast.
Honoring his pledge to use tax increases only as a last resort, the Governor’s proposed budget calls for no income, sales or small business tax boosts. In part because of expectations that the US economy will grow at a slower pace, Pritzker’s budget plan for state source revenues assumes a modest 1.9% growth in base revenue.
The Governor’s Office of Management and Budget has outlined estimates for various taxes. Specifically, it projects individual income taxes will grow $980 million (3.5%); corporate taxes will see a $353 million (7.2%) bump; and sales tax will increase $171 million (1.6%) in FY26. The budget plan also assumes new revenue through:
· Implementing a Delinquent Tax Payment Incentive Program ($198 million)
· Pausing the final shift of state sales taxes on motor fuel purchases to the Road Fund ($171 million)
· Realigning the tax treatment for table and economic games at casinos ($100 million)
All revenue enhancements will require substantive approval by the General Assembly.
Also on the table: closing the budget gap by upping various government efficiencies. Among them:
· Repealing obsolete boards and commissions
· Further consolidating the 767 separate fund accounts in the State Treasury
· Merging the Coroner Training Board into IDPH
· Integrating DHS’s Mental Health and Substance Use Prevention and Recovery divisions
· Realigning procurement expertise and resources for maximum savings and effectiveness
Healthcare and Family Services: The HFS budget includes a $300 million increase to fully annualize the costs of Medicaid rate increases and programmatic changes enacted last year. Also requested: $191.8 million for comprehensive behavioral health services integrated with physical healthcare; $132.8 million to continue the Pathways to Success Program; $15 million for the Medical Debt Relief Pilot Program; $27.7 million to develop an in-state network of Psychiatric Residential Treatment Facilities; and $132 million for the Health Benefits for Immigrant Seniors Program. Note that the Health Benefits for Immigrant Adults is not funded in the proposed budget.
Human Services: The Department of Human Services Budget includes $20 million for a $0.50/hour rate increase for Direct Service Providers (effective January 1, 2026) and $105 million for the Home Services Program for caseload growth. Also being proposed is dedicated funding for 9-8-8 services; $2.5 million for a 2% COLA for inpatient and outpatient substance abuse treatment services; $34 million to sustain substance abuse treatment and prevention services and to meet new Maintenance of Effort requirements; and $7.5 million for a 3% COLA for TANF cash assistance.
Children and Family Services: Funding is also being sought for 100 new positions at the agency; $17 million to help DCFS providers maintain a competitive wage; a $4.8 million increase for DCFS’s scholarship program; and funding for the Illinois Connect case management system.
Public Health: IDPH’s proposed budget includes an additional $6 million for the Office of Health Care Regulation (to ensure that healthcare facilities are compliant with state and federal regulations); $450,000 for the CNA Intern Program; and $250,000 for the Certified Medication Aide Program. Maintenance funding is being requested for an array of efforts, including to support reproductive health (with $10 million for a navigation hotline); grants for freestanding reproductive healthcare clinics ($2 million); a learning and training collaborative for providers ($5 million); and birth equity initiatives ($4 million). Funding is also maintained for the Breast and Cervical Cancer Programs, the AIDS Drug Assistance Program, and response efforts for unexpected public health threats and emergencies.
Aging: In-home providers would see a rate boost under the Governor’s proposed budget, as it includes a $144.44 million increase for the Community Care Program – which would also allow for utilization and caseload growth. Also scheduled for increases under the budget plan are the Home-Delivered Meals Program ($8 million); senior services in rural areas ($800,000); and the Adult Protective Services program ($2.2 million).
K – 12 Education Funding: For FY26, the Governor is proposing the mandatory $350 million increase for the Evidence-Based Funding Formula, thus bringing the EBF program to $8.9 billion. Also included is a $19.9 million increase (total of $1.2 billion) in categorical grants; funding for the third year of the Teacher Vacancy Grant Pilot Program ($45 million); and monies for the Computer Science Equity Grant Program($3 million) Being sought as well is $15 million for the Pipeline for the Advancement of the Healthcare Workforce Program, continued financial support for dual-credit and non-credit workforce grants at community colleges, and $3 million to expand the Common App for admissions.
Higher Education: Under the requested appropriations, MAP funding would see a $10 million increase ($721.6 million total), while community colleges would realize a $9 million increase and public universities are earmarked to get $47 million more than last year.
Early Childhood Education: As Smart Start Illinois heads into its third year of investments, funding requests include $21.7 million in operational monies for the Illinois Department of Early Childhood, $748 million to maintain ISBE Early Childhood Block Grant funding; $200 million for the Early Childhood Workforce Compensation Contracts; an additional $85 million for expected increased participation in the Child Care Assistance Program; $3.3 million to expand the Dolly Parton Imagination Library and $10 million to support Early Intervention provider rate increases.
Home Illinois: To help stabilize and assist the unhoused, the FY26 budget is seeking $282.7 million for the Home Illinois program. Among the recipients of the allocation would be the One System Initiative for shelters ($91.5 million); supportive housing, homelessness prevention, shelter diversions, addressing racial disparities and access to counsel ($62.3 million); court-based rental assistance ($50 million); emergency and transitional housing ($42 million); Rapid Rehousing services ($25 million); and the Home Illinois Workforce Pilot Project ($6 million)
Violence Prevention: Violence prevention — including reducing gun violence – receives attention under Pritzker’s FY26 budget proposal. Some $40 million would go to maintain the programs and services of the Reimagine Public Safety Act while $180 million is earmarked for the Restore, Reinvest and Renew Program; $4 million would be directed to statewide capacity building grants at CJIA; the Adult Redeploy and Diversion Programs would receive $13 million; $16.3 million would help support Community-Based Violence Prevention Programs; and $10 million would go to law enforcement agencies’ co-responder pilot program.
Pensions: The budget proposal also reflects full payment ($10.6 billion) of the FY26 certified pension contribution, while an additional $78 million would address the Tier 2 wage base.
Other Highlights:
· $5.4 million to support two new ISP cadet classes
· $1.3 million for the Safe2Help program
· $1 million for expenses related to in-car and body-worn cameras
· $35 million for Open Space Lands Acquisition and Development (OSLAD) grants
· $14 million for electric vehicle rebates
· $4.6 million increase to expand the Household Hazardous Waste Collection Program
· $5 million to fund the Grocery Initiative
· $20 million for Illinois Works Pre-Apprenticeship Program
· $10 million for the Federal Grant Support Program (offering funding to local governments and businesses competing in federal grant efforts)
Capital Plan: The proposed FY 26 budget includes $52.6 billion in total capital appropriations. The proposed capital plan reappropriates $3 billion of bonded capital investments and includes $915 million in new bond authorization (including $500 million for an expanded Site Readiness Program). Over half of these funds would go to transforming state-owned properties—like the former women’s prison in Dwight or mental-health and disabled-care facilities in Rockford and Lincoln—into sites for new private development.
New funding in the capital spending plan would also see: $300 million for the new Surplus to Success program at CMS; $150 million for demolition and remediation of non-surplus, unused state property at CDB; $200 million for expanded site readiness programs at DCEO; $140.2 million for continued economic and workforce development projects at DCEO; $65 million for DoIT to upgrade IT systems related to electronic health records at DOC and DHS; and $60 million for DNR to continue improvement of Adeline Jay Geo-Karis Illinois Beach State Park.
In an effort “to make life more affordable for working families and everyday Illinoisans,” Governor Pritzker also introduced new proposals addressing such areas as lowering prescription drug costs and improving access to affordable education.
Affordable Drug Costs: Citing a need to rein in “the unfair practices of PBMs, reduce drug costs for Illinois patients, and protect independent pharmacists,” the Governor called for passage of the Prescription Drug Affordability Act. Such a measure, he said, also gives full statutory authority to the Illinois Department of Insurance to examine the financials and records of PBMs and require them to submit to annual reporting and auditing.
On Wednesday afternoon, the Governor hosted a roundtable to discuss ways to lower prescription drug costs. The event was closed to the press.
Health Insurance Reforms: Additional health insurance reforms were requested by Pritzker. These include banning prior authorization for all behavioral healthcare and requiring insurers to reimburse rural Illinoisians for travel costs associated with medical appointments (when the distance traveled to medical providers exceeds network adequacy requirements).
Affordable Housing: With an eye to increasing access to affordable housing, the Governor is requesting reforms to financing, attracting capital, incentivizing builders, and eliminating unnecessary barriers to housing construction.
Public University Direct Admission Program: Pritzker also called on the General Assembly to approve the Public University Direct Admission Program Act, allowing students to know — before they apply — if they qualify for admission to the state’s public universities.
Community College Baccalaureate Program: Another proposal in the FY26 budget plan would allow some community colleges to offer four-year baccalaureate degrees to make them more accessible to working adults, particularly those not near a public university. Requiring approval from both the Illinois Board of Higher Education and the Illinois Community College Board, the initiative would let community colleges provide programs in subjects where the local workforce has unmet needs.
Screen-Free Schools: Requiring all school districts to adopt a policy banning cell phone use during classroom instruction was addressed in the Governor’s Wednesday message. The ban on cell phones is geared towards improving student achievement, social interaction, and mental health.
Township Consolidation: Simplifying the way voters reduce or eliminate township government through petition was also addressed by Pritzker, who suggested that cities or counties could provide services more cost-effectively. Illinois currently has 1,425 townships, collectively levying over $750 million in property taxes annually.
The proposal would lower the signature threshold needed for a ballot measure to eliminate or consolidate township governments – no longer requiring 10% of registered voters but rather, just 5% of voters in the most recent township election. The plan would also let county boards initiate a countywide referendum on the abolition of townships. Too, for counties with fewer than 5,000 people, the initiative would transfer the duties of township assessors to the respective county, thereby eliminating those positions.
Budget Reaction: Reaction to the Governor’s budget was mixed and underscores the spending pressures the General Assembly and the Governor face in crafting the final FY 26 budget.
Speaker Welch, as a guest on a radio show that aired live just before the Governor’s speech, predicted “You’re going see spending that matches our revenues based on priorities that we have as Illinoisans. It’s a responsible and compassionate budget. And that’s what we as a caucus are guided by.”
Senate President Don Harmon felt that “… [I]t was a speech for our moment … We have our work cut out for us, not just balancing Illinois’ budget, but also doing what we can to protect democracy. I applaud the governor for his leadership and look forward to working with him on our shared goals of assembling a balanced, responsible budget and building a better Illinois.”
Senate Republican Leader John Curran issued a statement saying: ” … Gov. Pritzker has once again increased [government spending], introducing a record-breaking $55.4 billion taxpayer-funded budget. His plan raises state spending by an astonishing 37 percent since he took office … [This plan] relies on the same gimmicks and job-killing taxes that hurt Illinois’ growth. We remain committed to standing up for taxpayers by demanding accountability and responsible spending to protect vital services throughout this year’s budget process.”
Echoing Curran’s sentiment, House Republican Leader Tony McCombie offered that, “Illinois families deserve an honest and transparent government – not one that increases spending by $2 billion and masks a $3.2 billion deficit on paper, setting taxpayers up for a potential tax hike on May 31. [This budget proposal] won’t grow our tax base; it will continue to punish businesses and hardworking Illinoisans.”
At a Black Caucus press conference after the budget address, Representative Carol Ammons said, “What I am clear about is that at this very moment, I’m a no vote on the budget … I work for the poor people of my district and my state, and our people are under attack and for them, not to even mention what is happening in our communities, not even the slightest mention, is an insult to this entire Black community. … Be willing to say no.”
Other Black Caucus members were more supportive of the Governor’s spending plan. Senator Elgie Sims, the Senate Democrats chief budget negotiator, said Pritzker’s proposal is a “great first step.”
Representative Terra Costa Howard, Chair of the House New Democrats Caucus (a coalition of moderate House Democrats) expressed her group’s reaction, “We are especially pleased that this budget proposal keeps spending almost flat while increasing K-12 funding by $350 million, boosting funding to our public universities, and investing in economic growth and jobs … [W]e look forward to working closely with the executive branch to craft a thoughtful, workable final budget.”
Comptroller Mendoza also weighed in, opining that, “… there is a lot to like in the Governor’s proposed budget. We protect the Rainy Day Fund; maintain our core responsibilities to schools, health care and public safety without starting costly new programs; and the proposed budget calls for NO tax hikes.”
Representative Lisa Hernandez, chair of the Democratic party, praised the budget plan and predicted: “Democrats across the state will work together to continue improving our finances and invest in budget priorities that move Illinois forward, all while working to protect Illinoisans from a harmful Trump agenda.”
The Illinois Chamber of Commerce expressed its stance: “Governor JB Pritzker presented an optimistic outlook for the Illinois economy during his budget address; however, several fiscal concerns remain unaddressed. [We support] commitments to long-term structural fiscal stability, a strong education system, and forward-thinking investments that promote business growth and new investments in the Land of Lincoln – all with no new taxes.”
The Senate Progressive Caucus noted that, “In the coming months, we vow to fight for a fair and equitable budget — one that ensures a high quality of life for all, irrespective of race, ethnicity, religion, disability or sexual orientation … [O]ur commitment to leveling the playing field and protecting our most vulnerable populations remains unshakeable.”
In a statement, the House Democratic budget negotiation team — lead by State Reps. Robyn Gabel, Kam Buckner, Will Guzzardi, and Eva-Dina Delgado — said that, “…[Illinoisans] need relief from the rising cost of living. They need smart investments in opportunity for a bright future. And they need to know someone has their back. These ideas have guided us as we’ve worked to deliver fiscally and socially responsible budgets—and, now more than ever, they will continue to guide us to a bright future. “
The Illinois Republican Party criticized the Governor’s budget, observing that, “What we heard today from Governor Pritzker was nothing more than grandstanding and hypocrisy from a politician who has already set his sights on his next pursuit of office. While President Trump is leading from the front, slashing government waste and spending to reduce the tax burden on American families, Governor Pritzker proposed yet another massive spending budget … We need Republican leadership in this state to cut the bloated spending, reduce the tax burden on our families rather than treat our state like a stepping stone to higher ambitions like Governor Pritzker has.”
Budget documents can be found here. The Governor’s speech is here.
103rd ILLINOIS GENERAL ASSEMBLY:
The Illinois General Assembly adjourned yesterday; session resumes February 25 – 27 (Tuesday through Thursday).
A replacement has been announced for retiring Senator Dan McConchie. Darby Hills – a former Cook County Prosecutor and current Barrington Hills Village Trustee — was selected by local Republicans, beating out Representative Marty McLaughlin, Ela Township Trustee Tosi Ufodike, and Long Grove Trustee Chris Borawski. Hills is expected to be sworn into office by Friday, will fill out the remainder of McConchie’s term and then run for election in 2026.
A lawsuit by Thomas DeVore, a failed 2022 Attorney General candidate, challenges Hills’ selection, claiming Hills is not a Republican and therefore cannot serve as McConchie’s replacement. The lawsuit references state law, which requires appointees to legislative vacancies to be from the same party and outlines ways to prove partisanship, none of which DeVore claims Hills has done.
The lawsuit prompted local Republicans to revisit the appointment process. They will meet again this Friday afternoon “to ensure that there can be no question as to whether the process we followed properly empowered the Committee to act to fill the vacancy in this Office.” Read more here.
Relations are improving within the House Republican caucus. Leader McCombie restored the privileges of the House Freedom Caucus, including appointments to committee leadership roles and access to staff and other resources. Serving as Republican Spokespersons are: Representative Adam Niemerg on the House Immigration and Human Rights Committee; Representative Chris Miller on the Economic Opportunity & Equity Committee; Representative Brad Halbrook on the Counties & Townships Committee; and Representative Blaine Wilhour on the Appropriations – Elementary & Secondary Education Committee.
2025 Spring Session Key Dates and Deadlines:
March 21: Deadline – Committee Deadline Both Chambers
April 11: Deadline – Third Reading Deadline Both Chambers
May 9: Deadline – Committee Deadline Bills in Opposite Chamber
May 23: Deadline – Third Reading Deadline Bills in Opposite Chamber
May 31: Adjournment
OTHER NEWS:
Executive Order: Governor Pritzker issued Executive Order 2025-01, which reorganizes the Department of Human Services by consolidating the Division of Mental Health and Division of Substance Use Prevention and Recovery into the new Division of Behavioral Health and Recovery, effective July 1, 2025. Read more here.
New Laws: Governor Pritzker signed HB 587 which represents the mini energy omnibus passed during the January lame-duck session. The new law makes Illinois more attractive for renewable energy developers, creates an ICC workshop process intended to guide a future battery storage procurement, and establishes labor and workforce diversity provisions for transmission projects. Also requires yearly updates to Solar for All income eligibility (instead of every five years).
Innovation Voucher Program: The awarding of $2.3 million (embodied in 35 awards) has been announced by Governor Pritzker and Illinois Department of Commerce and Economic Opportunity. The funding comes through the Innovation Voucher Program, aimed at promoting small business growth and fostering transformative collaborations across Illinois. In addition, the Governor revealed that an additional $2.6 million in grant funding will be available for the second round of the IVP. Recipients will be chosen based on a competitive application process. Read more here.
Gubernatorial Appointments: Governor Pritzker has announced that:
· Rocco Zucchero will serve as a member of the Illinois Racing Board.
· Janice Glenn will continue to serve as a member of the Illinois Human Rights Commission.
Chicago School Board: Chicago Mayor Brandon Johnson named Cydney Wallace as his final appointee to the Chicago School Board. An employee of the City Clerk’s office, Wallace is also a board member for the Jewish Council on Urban Affairs. Read more here.