Pritzker Signs 2026 Illinois State Budget into Law
Illinois Governor J.B. Pritzker signed six bills comprising the state’s Fiscal Year 2026 budget into law Monday, June 16th, the earliest provisions of which will take effect in roughly two weeks on July 1st. Whereas state budgets historically were passed in the form of a single omnibus bill, the budget for next year was passed in six different pieces of legislation: a forecasted budget, an implementation bill, an authorization for new bonds, revenue and collection estimates, and two additional spending bills were sent to the Governor’s desk to be signed simultaneously.
The Governor’s administration has held the budget out as a political success; the seventh consecutive balanced budget signed by Governor Pritzker since he took office in 2019. In sum total, the budget legislation estimates a surplus of $217 million, representing $55.3 billion in revenue less $55.08 billion in appropriations and expenditures. Governor Pritzker reduced appropriations by $161 million by eliminating supposed duplicative costs, depositing the same amount in the “rainy day” fund estimated to grow to $2.5 billion by the end of next year. A $100 million “bridge” reserve to cover potential unexpected shortfalls in implementing the budget was seeded with surpluses in large balance State Treasury accounts. Adjustments to the pension contributions of State Tier 2 employees, a source of budgetary anxiety for state lawmakers, was afforded $75 million in additional contributions and $200 million in buyouts to reduce the state’s pension liabilities. Pursuant to Governor Pritzker’s plan to mitigate healthcare and medication costs, $25 million was afforded to support local pharmacies while $53 million was appropriated to fully implement the State-Based Marketplace health insurance exchange; the Medical Debt Relief Program, which has forgiven over $330 million in medical debt for mor than 290,000 Illinoisans, was also approved for continuation. Childcare also continues to be a priority in the forecasted budget: the Department of Children and Family Services’ budget was raised to $2.5 billion, and nearly a billion more was appropriated for in-state early childhood programs and childcare providers.
The legislation also contains a slew of new tax rates aimed at increasing revenue to account for increased expenditures. A per-wager tax on sports betting will take effect July 1st. The first 20 million wagers placed after the increase will be taxed at a rate of $0.25 per wager, after which it will increase permanently to $0.50 per wager. Taxes on short-term vacation rentals, such as AirBnB, will go into effect to match existing state and municipal taxes on hotel and convention center accommodations. The state tax on tobacco products is to be raised from 36% to 45%.
Notably, lawmakers were unable to address fiscal deficiencies for public transit in Chicago. After passing one chamber, legislation which would raise funding for transit agencies stalled amidst negotiations as lawmakers sought to consolidate CTA, Metra, and Pace under a common leadership over which they would have expanded influence. It is unclear whether a special session will be called to address the transit cliff, which now requires a 60% majority to address.
For more information on state fiscal policy developments and how they may affect your business and personal finances, contact any of the qualified attorneys at Rock Fusco & Connelly, LLC