Illinois’ proposed $56.1B budget unveiled, faces federal funding cuts

• Illinois Governor JB Pritzker has proposed a $56.1 billion budget for fiscal year 2027.
• The budget proposal reflects continued economic uncertainty and a loss of $1.7 billion from federal actions.
• Pritzker’s plan includes new revenue from a social media fee and changes to casino and corporate taxes.

SPRINGFIELD – Illinois now has a proposed budget for fiscal year 2027, followed by Gov. JB Pritzker’s speech — both reflecting continued uncertainty surrounding the state’s economic outlook.

The proposed budget totals $56.1 billion in spending for the new fiscal year, which begins July 1. The spending is up $878 million from the current year, but most of the spending is required in areas like pensions and education.

Pritzker before the state’s senators and representatives, said the Trump administration has so far cost the people of Illinois $8.4 billion.

"When we gathered here a year ago, President Trump had just taken office," he said. "To be perfectly candid, as Illinois is one of the states whose taxpayers send more dollars to the federal government than we receive back in services, I was hoping that his threats to gut programs that support working families was the kind of unrealistic hyperbole that fuels a presidential campaign but then is abandoned when cooler heads prevail. Unfortunately, there are no cooler heads at 1600 Pennsylvania Avenue these days."

More: Illinois budget faces uncertainty as federal funding cuts loom

While economic activity is currently stable, not much has changed from a year ago, with continued uncertainty surrounding the economic outlook, according to budget officials in the governor’s office.

Illinois’ proposed budget reflects a loss of $1.7 billion from federal actions, including nearly $400 million in lost revenues due to H.R. 1, more commonly known as the One Big Beautiful Bill Act.

The state is seeing a loss of $339 million from federal tax law changes and $60 million from reduced reimbursement for Supplemental Nutrition Assistance Program administration costs.

Requirements the state has to meet to implement H.R. 1 will cost Illinois an estimated $100 million in Fiscal Year 2026 and 2027, according to the governor’s office.

Over $1 billion in FY27 grant cuts are currently in litigation.

The FY27 projected revenue forecast benefits from several proposed revenue adjustments, including:

• Social Media Platform Fee – $200 million dedicated to supporting education
• Adjust Net Operating Loss Deduction cap sunset to a phased in approach – $269 million impact to corporate income taxes
• Realignment of tax treatment for table and electronic games at casinos – $120 million

More: Thomas Pritzker steps down from Hyatt Hotels over ties to Epstein

Investments

The proposed fiscal year 2027 budget sees continued investments in early childhood education and child care, K-12 education, higher education, economic development, and efforts to fight poverty, according to the officials.

The proposed budget maintains SMART START ILLINOIS to move toward the new comprehensive approach to early learning via a consolidated agency. The budget also builds on previous higher education investments, the officials said.

Additionally, the proposed budget provides record funding for human services and Illinois’ social safety network. It ensures healthcare and food access to raise families out of poverty.

The proposed budget also further invests in Illinois’ economic infrastructure to support private sector job creation and make Illinois more competitive on the national stage.

Tom Ackerman covers breaking news and trending news along with general news for the Springfield State Journal-Register. He can be reached at tackerman@usatodayco.com.