Illinois Democrats float delivery fees and sports betting tax hike as legislative clock winds down

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Illinois lawmakers were cutting it close to a key constitutional deadline to pass their $55.2 billion state budget package late Saturday, while the fate of a bill to overhaul Chicago-area mass transit governance hinged on legislators’ appetite to slap a $1.50 fee on package and food deliveries.

The budget proposal relies on tax hikes that would hit smokers, gamblers and big corporations to help seal an estimated $1 billion shortfall.

Democratic members of the General Assembly were confident they’d pass the budget by a midnight deadline, but weren’t as sure about the transit package, a separate measure that would create the new delivery tax to help the CTA, Metra and Pace avert a $770 million fiscal cliff next year.

The broader spending plan largely follows Gov. JB Pritzker’s February budget proposal, which slashed a state health care program for immigrants without legal status, despite vehement opposition from the progressive wing the supermajority party.

The Health Benefits for Immigrant Adults program was among some $400 million left on the Capitol cutting room floor, as Democrats tried to make ends meet in a difficult budget year with the looming specter of federal funding cuts under President Donald Trump’s administration.

On the other side of the balance sheet, lawmakers aimed to impose a digital advertising tax on giant tech corporations, and slap taxes of a quarter or $0.50 on every online sports wager — a measure that would hit DraftKings and FanDuel just a year after legislators’ imposed a hefty graduated tax system on the booming industry.

Taxes were also set to be boosted up to 45% on cigarettes, e-cigarettes, nicotine pouches and chewing tobacco.

“We’re presenting a budget that meets this moment. It is balanced through smart cuts and through smart revenues, not balanced on the backs of working families,” said state Rep. Robyn Gabel, an Evanston Democrat and one of the top House budget negotiators. “It uses the best information we have at this uncertain time to make the best decisions for our state.”

Lawmakers were expected to maintain $110 million in funding for health care for people 65 or older without legal status, but nearly 33,000 people between 42 and 64 were expected to be left uncovered.

“It’s a budget that’s gonna hurt,” said state Rep. Lisa Hernandez, D-Cicero, a deputy majority leader who said she was still undecided on if she’d support the spending plan ultimately advanced by Illinois House Speaker Emanuel “Chris” Welch and state Senate President Don Harmon.

“For this to just get ripped off, from now receiving treatment to not receiving treatment at all — how do you just do that?” Hernandez said.

Meanwhile, sports betting industry lobbyists were feverishly trying to swat away the new per-wager sports betting tax, while lawmakers wrangled over a 10% proposed digital advertising tax that would likely exclusively apply to huge companies like Facebook.

Controversial ‘pizza tax’ floated to fill mass transit budget hole

And the $1.50 delivery fee for the transit funding bill — which would see annual increases tied to inflation — faced vehement opposition of its own from the business community.

Legislators mostly agreed on a new governance structure that empower a new Northern Illinois Transit Authority to set unified fares, allow for easier transfers and assume capital planning responsibilities, all under a 20-person board including five appointees each for the governor, Chicago mayor and Cook County board president and others from collar county board chairs.

But the delivery fee to inject $1.5 billion in transit funding as federal COVID-19 relief dollars dry up proved almost as sticky a point as the toll hike and suburban sales tax diversion that tanked an earlier version of the bill.

The fee, which wouldn’t apply to groceries or medicine, was branded by supporters as an “environmental impact fee,” but slammed by opponents as a regressive “pizza tax.”

State Sen. Ram Villivalam, D-Chicago, called it the most effective way to avoid 40% system-wide cuts to service and mass layoffs.

Superminority Republicans, boxed out of budget talks as usual, roundly bashed the Democratic plan.

“You know how it’s a bad budget? When it starts out with at least $1 billion in taxes,” said Senate Minority Leader John Curran, R-Downers Grove.

While state legislators routinely pass budgets in the wee hours of spring sessions in the Capitol, Democrats were under the gun to get it all done before the clock struck midnight into June 1, when bills constitutionally require a three-fifths majority to pass, not just a simple one.

Bills comprising the budget package were still zigzagging across the capitol by 9 p.m., barely a day after the first budget details were publicly unveiled after months of negotiations behind closed doors.

“We’re supposed to be vetting this stuff. We’re not doing our jobs. We need more time on this stuff,” said state Rep. John Cabello, R-Machesney Park.

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May 31, 2025 at 10:53PM

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