February 22, 2024 Update


A joint session of the Illinois General Assembly convened on Wednesday to hear Governor Pritzker’s sixth Budget and State of the State address. Woven into the speech were highlights of his administration to date, including nine credit upgrades, a $2 billion investment in the Rainy-Day Fund, and the elimination of the bill backlog. The chief executive cautioned that his FY25 budget proposal “makes some hard choices,” and that the fiscal situation would be “tight” compared to the past few cycles. But he also urged lawmakers: “[do] not let the doom grifters steal your optimism about what’s ahead for Illinois. Our future is bright, and opportunity lies ahead.” 

Proposed FY25 Budget: Overall, Pritzker laid out a spending plan that is a 2% increase over FY24 estimated spending. Specifically, he envisions FY25 expenditures of $123.2 billion All Funds, including $52.695 billion in General Funds. This is a $752 million bump over the current budget.

His budget is predicated on $52.993 billion in general revenue. This assumes a 1.5% increase (or $777 million) over FY24 levels. Driving that expectation in part is evidence that a 3% hike (or $1.399 billion) is in the offing from the several sources including the Big Three sources of revenue (personal income taxes, corporate income taxes, and sales taxes). But a “muting factor” is in play too as some one-time transfers seen in FY24 are not apt to occur in FY25.

In November, the Governor’s Office of Management and Budget projected an $891 million deficit for the upcoming fiscal year. The Governor “erased” that deficit in his proposed budget by building new revenue into the base budget. At least part of the Governor’s revenue assumption is legislation-dependent — more than $1 billion in additional revenue is contingent on statutory changes requiring the approval of the General Assembly. Pritzker is calling for alterations in allocating/distributing of various taxes, expected to net $1.073 billion. Note that once $22 million in “tax relief” is allocated, that figure comes in at $910 million net.

State income tax rates go untouched under Pritzker’s FY25 budget plan. But changes are in store for sports wagering, corporate, and other taxes to underwrite the spending plan that is set to begin July 1.

FY25’s single most significant source of new funding – projected to yield an additional $526 million – is expected to come from a continuation on the limit on the Corporate Net Operating Loss Deduction. The budget plan calls for increasing the cap to $500,000 and extending the limit through tax year 2027.

cap of $1,000/month would be imposed on the Sales Tax Retailers Discount which is projected to yield an additional $101 million to GRF. The tax on sports wagering licenses would double from 15% to 35% to provide an additional $200 million. Under the proposal, 15% of the tax would continue to be transferred into the Capital Projects Fund (to help pay debt service) while the other 20% would be destined for the General Revenue Fund. The final new revenue stream would involve setting the standard deduction at $2,550 for tax year 2024, plus adjusting for cost-of-living for future tax years which would add another $93 million.

Governor Pritzker is also proposing to shift GRF burdens for Mass Transit onto the Road Fund. Projected result which would allow an additional $175 million in the General Revenue Fund.

For tax year 2025, the Governor is calling for the first $10,000 in liability to be exempt from the Franchise Tax. The administration anticipates this will cost the state $10 million. Taxpayers with children under the age of 3 would qualify for a refundable child tax credit (equal to 20% of a taxpayer’s state earned income tax credit) as laid out by Pritzker in his budget address. The measure would cost the state $12 million. The Governor also proposes permanently eliminating the state’s one percent grocery tax.

FY 24 Supplemental: In total, $1.183 billion is being requested to address FY24 supplemental spending for several agencies including $430 million for the Department of Healthcare and Family Services, $347 million for the Department of Human Services, and $350 million for DCEO to support “big projects”. More information on line items is here.

Budget Stabilization Fund: The Governor directs in his proposal that surpluses from FY 24 and FY25 be allocated to the Budget Stabilization Fund. Fiscal Year 24 is expected to end with a $273 million budgetary surplus – of which $205 million would go into the Budget Stabilization Fund. For FY25, a budgetary surplus of around $298 million is anticipated, with $170 million of that destined for the Budget Stabilization Fund.  

Healthcare and Family Services: FY25 Medicaid liability is projected to total $26.8 billion all funds (0.1% increase) with total enrollment projected at 3.6 million. The proposed budget includes a $497.9 million increase to annualize Medicaid program rate increases and changes effective mid-FY 24. A new Medicaid tiered safety net hospital add-on is set to receive $50 million. DHFS is also allocated $629 million for the Health Benefits for Immigrant Adults and Health Benefits for Immigrant Seniors program ($440 million GRF).

Human Services: The FY25 proposed budget includes $2.4 billion for services for people with developmental disabilities in support of the Ligas consent decree. An extra $116 million is allocated to support expected caseload growth and liability increases. Also included is $182 million for forensic inpatient and outpatient services, 9-8-8 hotline, and support of the Williams and Colber consent decrees.

Home Illinois is a program housed in DHS that targets the prevention of homelessness, provides crisis response, expands housing support and increases job opportunities for the homeless. The proposed FY 25 budget request increases the program by $50 million allocated as follows: $35 million to maintain court-based rental assistance; $181 million to support unhoused populations seeking shelter and services; $25 million in Rapid ReHousing services; $42 million to maintain funding for current support housing; $33 million to provide street outreach, medical respite, re-entry services, access to counsel, and other shelter diversion; and an additional $5 million to convert temporary shelters to sustainable community assets.

With regard to migrant funding, the proposed FY25 budget allocates $182 million to DHS to support the joint response of the State of Illinois, City of Chicago and Cooky County to fund welcoming centers ($115 million) and Home Illinois ($67 million).

DHS is allocated an additional $5 million to expand the Home Visiting Program and $1 million for a low-income diaper program.

Public Health: The FY 25 budget proposes $6 million to hire 100 additional staff in the Office of Health Care Regulation; $400,000 for a Homelessness Mortality and Morbidity Report to address health issues of the housing insecure; $45 million to support IT replacement for Illinois’ National Electronic Disease Surveillance System and Long-Term Care systems; and provides capital funding to adopt plans for a Chicago-area public health lab and to rebuild the Carbondale public health lab. 

Insofar as reproductive health is concerned, the proposed budget includes $2 million in grants for freestanding reproductive health care clinics and $18 million to support existing reproductive health initiatives, including the navigation hotline and the learning/training collaborative for providers.   

Too, the FY 25 proposed budget includes $4.4 million for the Department of Public Health to assess the state’s maternal mortality rate and to create an action plan that centers on reproductive care through community-based providers, support community-based, full spectrum care birth centers and a state action plan that centers on community-based reproductive healthcare providers that are in and of the communities they serve 

Children and Family Services: The proposed budget for DCFS includes funding to hire an additional 392 positions to support DCFS caseloads and to continue rate reform for private sector providers. Also included is a $38.9 million increase to continue the rollout of the Comprehensive Child Welfare Information System and an additional $10 million for worker and private sector partner security investments. Also included the proposed spending plan is a $100 million one-time investment for capital grants to providers to help increase capacity for youth placement in the most clinically appropriate setting. 

Aging: The FY 25 proposed budget includes a $104.4 million increase for the Community Care Program; a $3 million increase for the Home-Delivered Meals Program and maintains funding to support services in rural areas and increased minority outreach.

K – 12 Education Funding: The Illinois State Board of Education will receive a $449 million increase in GRF. The Evidence Based Funding Formula will receive an additional $350 million. The Governor’s proposed budget includes $30.7 million to fully fund special education and increase funding for transportation. Career and technical education programs are allocated an additional $10.2 million.   

Higher Education: The Governor’s proposed FY 25 budget includes a $10 million increase in MAP funding; a $30.6 million increase for public universities and community colleges; and $450,000 to extend the Common Application simplified admissions process to transfer students from community colleges. 

Capital Budget: The proposed FY 25 budget includes $51.0 billion in total capital appropriations. The proposed capital budget includes new capital appropriations of $3 billion in new bond fund appropriations including: $500 million for new quantum-related investments; $139 million to DECO for economic improvement programs; $900 million for maintenance and modernization of DOC facilities; $575 million for deferred maintenance and construction at higher education facilities; $157 million for additional funding to support construction of the new DPH lab in Chicago and Carbondale; $513 million for deferred maintenance and construction at state facilities; $100 million to DCFS for a multi-year capital grant program to improve capacity for youth placement; $65 million for CDB to complete a new DoIT central computing facility; $60 million to DoIT to complete various tech projects; and $20 million for a new Department of Military Affairs Illinois National Guard readiness center in Peoria.  

Pensions: The proposed budget reflects full payment of the required $10.1 billion pension payment. Pritzker is also proposing to change the state’s “pension ramp” by increasing the target funding percentage for pensions funds from 90 to 100 percent and adding another three years for the ramp to reach full funding – from FY45 to FY48. 

The Governor also proposes addressing the challenge of a shortening “runway” through fixed length amortization strips beginning in 2035 which is projected to soften the potential “shock” to the state budget from short-term negative returns.

Finally, the Governor suggests a review and, if necessary, adjustment to the Tier 2 pensionable earning cap to the Social Security Wage Base for employees not coordinated with Social Security. This will impact mostly TRS and SURS members as well as a limited number of SERS members.

Erasing Medical Debt: The FY25 budget invests $10 million in federal funds to erase medical debt for an estimated 364,000 Illinois residents. The initial investment is part of a multi-year plan to erase more than $1 billion in medical debt. A similar program is in place in Cook County.

Children’s Behavioral Health Transformation: The proposed FY25 budget includes almost $35 million to continue funding and implementing the Children’s Behavioral Health Transformation Initiative. The Governor is proposing $31.3 million for Comprehensive Community Based Youth Services expansion; $2 million for pediatric mental health training and $1.5 million for BEACON – an online portal for families to access behavioral and mental health resources.

Smart Start Illinois: The Governor is proposing an additional $150 million ($400 million total) for Smart Start Illinois. The proposed budget includes $13 million to launch the Department of Early Childhood; $75 million in additional ISBE Early Childhood Block Grant funding; and a $200 million investment in funding for Early Childhood Workforce Compensation Contracts. DHS’ Home Visiting Program will receive an additional $5 million and $36.4 million is proposed to support higher participation in the Child Care Assistance Program. The Dolly Parton Imagination Library program will receive $3.5 million.

State Based Marketplace: The Governor is proposing $17.8 million for the Department of Insurance and $6 million for the Department of Healthcare and Family Services to roll out the state-based marketplace. Agency funding will support staffing, consumer assistance, navigators, marketing and advertising and costs for an enrollment website. Another $6 million is proposed for Get Covered Illinois to expand outreach and marketing. 

Health Insurance Reform: The Governor also used today’s speech to outline his mission to curb what he calls “predatory insurance practices.” The Healthcare Consumer Access and Protection Act makes several changes to insurance policy including: bans step therapy entirely, bans prior authorization for in-patient mental health care, establishes statewide standards on clinical criteria when performing utilization review; prohibits insurance companies from selling Short Term Limited Duration Plans; requires insurers to publicly list all treatments that require prior authorization; and prevent insurance companies from unfairly increasing rates on consumers.

Other Budget Highlights

·       $1 million for grants to providers to expand safe and accessible pregnancy support.

·       $5.3 million to fund two cadet classes to hire an additional 100 additional state troopers

·       $30 million for the Law Enforcement Camera Grant Fund

·       $200 million to fund Restore, Reinvest, Renew (R3) program to provide flexibility with the disbursement of additional grants

·       $1 million for InfoNet – a reporting system for victim service providers

·       $30 million in additional funds for the Reimagine Public Safety grant program

·       $20 million in capital funding to continue the Illinois Works Construction pre-apprenticeship program

·       $1.4 million for Illinois Words

·       $10 million for the Grocery Initiative to address food insecurity

·       $25 million for competitive business development capital grants to expand, rehabilitee or relocate private businesses to Illinois

·       $30 million for OSLAD grants

·       $12 million for electric vehicle rebates

·       $20 million in capital funds for the Lead Service Line Replacement Inventory grants

·       $10 million for the Great Lakes Environmental Justice Program

·       $70 million to address emerging contaminants in small and disadvantaged communities to confront PFAS pollution

·       $10 million to expand existing grant programs for arts organizations and individuals

Reaction to the Governor’s proposed budget was mixed and illustrates the spending pressures the General Assembly and the Governor will face in crafting the final FY 25 budget. 

The Transportation for Illinois Coalition, an umbrella organization of business, labor and infrastructure groups that advocates for federal and state transportation funding said, “We are disappointed in and cannot support the Governor’s budget proposal to cut transportation funding after just a few years of Rebuild Illinois’ important investment in our state transportation infrastructure.”

SEIU Healthcare said “While his leadership as an advocate for providing needed care services was evident in the Governor’s address, his proposed funding priorities fall short from what is required to address Illinois’ ongoing care crisis.”

The Illinois Association of Rehabilitation Facilities noted “we are deeply concerned that the Governor’s budget proposal does not include any increases in wage rates for DSPs.”

Planned Parenthood Illinois Action “urges the governor and state legislature to expand funding for family planning resources and address inequities in sexual reproductive education.”

While the Community Behavioral Healthcare Association applauds the Governor’s insurance proposals, they said, “Nevertheless, the governor’s FY2025 budget makes no new investments that the state needs to continue to boost funding to strengthen the behavioral healthcare workforce and create more access to care. Thus, the Community Behavioral Healthcare Association will vigorously advocate with lawmakers for increased investment in care and the workforce in next year’s budget.”

In response to the elimination of the grocery tax, the Illinois Municipal League said the proposal is “an insult to every local government that is providing important services to residents.”

The Illinois Hospital and Health Association praised Pritzker’s insurance reforms saying “IHA strongly supports the Administration’s proposal to hold payers accountable for their conflicting, confusing and unnecessarily burdensome prior authorization practices”.

Senate President Don Harmon said Pritzker’s proposal was “a good start” for negotiations to begin. “Senate Democrats look forward to the discussion of how to balance our serious needs with fiscal realities in the weeks and months ahead. My goal is to cross the finish line with a bipartisan, balanced budget that reflects our shared goals of responsibility and security and invests in key priorities for the state of Illinois,” Harmon said.

“Like every year, we have pressure points, but we will continue making fiscally responsible decisions that put our state on a path of progress,” Speaker Welch said. “I am confident Chief Budgeteer Jehan Gordon-Booth, our budget negotiation team, and our appropriations chairs will put in the necessary work to craft a final budget that is reflective of our values as Illinoisans.”

House Republican Leader Tony McCombie said the two important things for House Republicans were funding for education and having the pension bill paid off this year. “That was in, so that’s the good part,” McCombie said. “The bad part is that we’re going to have $910 million in tax increases. Over … 2024 and 2025, we’re going to be spending $2.8 billion on the undocumented and migrant folks that are coming to Illinois.” 

Senate Republican Leader John Curran said, “The Governor just proposed raising taxes on every Illinois family struggling to make ends meet to fund the non-citizen welfare state he created. We have made it clear that the citizens of this state are our priority, while today, the Governor made it clear they’re his piggy bank. Our focus will remain on providing meaningful financial relief to the people of Illinois.”

Appropriations committees in both chambers will now begin the process of reviewing agency budget requests. The new Fiscal Year begins July 1.

The Governor’s speech is here. Additional budget documentation is here. 


The Illinois General Assembly will adjourn today. Both chambers will take next week off and will return to session on Tuesday, March 5. The Senate is scheduled to be in session for four days while the House is scheduled to be in session for three days.

When legislators return, they will focus on considering legislation at the committee level. The Senate will only have two session weeks prior to the deadline to pass substantive Senate Bills out of Senate Committee – the deadline is Friday, March 15. The House has four weeks of committee action prior to the House Bill Committee deadline of April 5. 

Representative Cyril Nicols is withdrawing from the March primary ballot. Nichols, who was in a hotly contested race, was facing well-funded primary opponent Lisa Davis.

The House Public Utilities Committee heard subject matter testimony Tuesday on a measure to grant a permanent right of first refusal to all existing electric utilities in the state. Representatives of the energy sector and consumer advocates testified on the issue; no vote was taken. Read more about the hearing here.

2024 Key Dates and Session Deadlines:

March 15: Senate Committee Deadline for Senate Bills

March 19: Primary Election

April 5: House Committee Deadline for House Bills

April 12: Senate Third Reading Deadline

April 19: House Third Reading Deadline

May 3: Committee Deadline for Bills in the Opposite Chamber

May 17: House and Senate Third Reading Deadline for Bills in the Opposite Chamber

May 24: Adjournment

May 25 – 31: Contingent Session Days


Chicago White Sox owner Jerry Reinsdorf was in Springfield this week to meet with legislative leaders as he seeks $1 billion in public funding for the new baseball stadium. Governor Pritzker has publicly stated his reluctance to a taxpayer funded stadium, he remains open to learning more about the proposal. Read more on the proposal here.

City of Chicago Sues Oil and Gas Companies for Climate Deception: On Tuesday, Mayor Brandon Johnson announced that the city of Chicago is suing six oil and gas corporations and their largest trade association for allegedly deceiving Chicago consumers about the climate dangers associated with the products. The suit was filed in the Circuit Court of Cook County and names BP, Chevron, ConocoPhillips, ExxonMobil, Phillips 66, Shell and the American Petroleum Institute as Defendants.

Energy Efficiency and Conservation Block Grant: Another $2 million in grants will be available through the Energy Efficiency and Conservation Block Grant Program (EECBG). The grant awards range from $25,000 to $150,000 and will assist eligible municipalities or counties in implementing strategies to reduce greenhouse gas emissions, reduce total energy use, improve energy efficiency in the transportation sector, and build a clean and equitable energy economy prioritizing disadvantaged communities. Read more here.

Capital Development Board: Governor Pritzker reappointed Eileen Rhodes to serve as a Member of the Capital Development Board.