On February 19, 2025, Governor JB Pritzker delivered his seventh State Fiscal Year (SFY) Budget Address to a joint session of the General Assembly. This update provides highlights from the address and links to key budget documents.
ISACo will review the budget proposal for county impacts and advocate for county interests over the next several months as the General Assembly works with the Governor's Office on a final SFY2026 state budget.
Overview
The Governor's proposed SFY2026 operating budget estimates total revenues of $55.453 billion and $55.234 billion in total spending. This would yield a budget surplus of $218 million.
There do not appear to be any proposed changes to the Local Government Distributive Fund (LGDF) in the proposed budget.
Governor Pritzker's investment priorities are as follows:
- Early Childhood Education and Child Care Funding
- K-12 Education
- Higher Education
- Health and Human Services
- Public Safety and Violence Prevention
- Growing the Economy and Investing in the Workforce of the Future
- Environmental, Natural, and Cultural Resources
Governor Pritzker's operating budget includes additional and reappropriated funding for capital projects. The Governor's proposal includes $915 million in new bond authorization to continue enhancing Rebuild Illinois. Total capital expenditures since the passage of Rebuild Illinois have reached $27.768 billion (SFY 2020-December 31, 2024). The Governor's proposed budget reappropriates $3 billion of bonded capital investments first enacted in fiscal year 2025.
During his address, the Governor indicated that he will only sign a balanced budget into law. He offered several proposals to reign in costs intended to close the budget deficit.
The Governor aims to bridge the budget gap by generating nearly half a billion dollars in additional state revenue—not through general tax hikes, but by granting amnesty to delinquent taxpayers, increasing casino gaming taxes (with Chicago being the only exemption), and removing a tax deduction for legal marijuana businesses.
He also proposed eliminating medical coverage for non-citizen adults aged 42-65, though coverage for older non-citizens will remain intact under the Health Benefits for Immigrant Seniors program.
Additionally, he plans to cut funding for immigrant welcoming centers by almost $100 million, reducing the allocation to $40 million.
The budget does provide additional dollars for other purposes.
The budget package includes Illinois’ legally mandated $10.6 billion contribution to the state’s pension funds, which accounts for nearly 20 percent of the general funds budget.
Additionally, $78 million is allocated for pension enhancements targeting Tier 2 employees—those hired after 2011 who receive lower retirement benefits than earlier hires. The Governor is seeking to address a potential “safe harbor” legal issue, which could arise if these benefits are deemed insufficient compared to Social Security provisions.
If the Governor’s proposal is approved, an additional $500 million would be allocated to prepare properties, including unused state land, for business development—a strategy the Governor's Office claims could generate $4.7 billion in private investment.
Governor Pritzker’s plan does not include a solution to address the $770 million annual shortfall in transit funding for the Chicago region.
Continuing his commitment to education funding, the Governor plans to invest an additional $350 million into the evidence-based formula, which prioritizes resources for the most underfunded K-12 schools.
Key Documents
The text of Governor Pritzker's speech is available via this link.
The "Budget in Brief" document is available by clicking on the image below.
The proposed SFY2026 operating budget is available by clicking on the image below.
The proposed SFY2026 Capitol Budget is available by clicking on the link below.
