Gov. JB Pritzker on Tuesday signed Illinois’ $56 billion budget for the upcoming 2027 fiscal year, which begins July 1. It’s the largest budget in state history.
The spending plan does not increase state income taxes or sales taxes, but enacts new taxes on social media companies, digital assets, fantasy sports, remote tobacco retailers, and sports betting on prediction market websites.
It includes more than $300 million in new funding for public education and $100 million for families facing food insecurity.
There is also a sales tax holiday on school supplies from Aug. 7 to Aug. 16, and the budget pauses the previously planned 1.3 cents-per-gallon increase to the state gas tax, delaying it from July 1 to Jan. 1.
"Here in Illinois, midwestern grit, hard work, and decency have guided our state to balancing our budget and living within our means, all while fighting to lower costs for Illinois families," Pritzker said.
The budget also calls for transferring $150 million in sales tax revenue from gas to the General Revenue Fund once public transportation is fully funded, opening that revenue up to be spent on any purpose.
That state plans to spend $143 million on a healthcare program for undocumented immigrant seniors and another $4 million on welcoming centers that provide services to immigrants arriving in Illinois.
Lawmakers incorporated a pair of the tax changes that Pritzker had proposed in February. One would lower the cap on corporate net operating loss deductions for business. Another would impose a tax on social media companies based on the number of users the platform has in Illinois. Combined, those would generate $500 million in new revenue.
Social media companies would be taxed on a progressive scale starting with platforms with 100,000 to 499,999 users paying 10 cents per month for each user all the way up to platforms with at least 1 million users paying a $165,000 fee plus 50 cents for each user each month. A similar tax in Chicago is already tied up in court.
New taxes on digital asset sales and fantasy sports are expected to generate $65 million. The state would create a licensing structure for fantasy sports operators and impose a 15% tax on each business — something Rep. Curtis Tarver, D-Chicago, said the industry themselves requested.
Consumers purchasing tires will also see a 50-cent increase in a tax on those purchases, which primarily funds a waste disposal fund.
Sports bets on prediction markets and remote tobacco retailers would also be taxed under the plan.
To get the budget across the finish line, Democrats — especially progressives — had to temper their expectations. Many had called for new progressive revenue measures throughout the session, including taxes on big corporations and billionaires and for Illinois to untie itself from parts of the federal tax code.
Republicans have argued the budget relies too heavily on tax hikes, and could place a greater financial burden on Illinois families.
Capitol News Illinois contributed to this report
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June 16, 2026 at 11:53AM
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