5 things Illinois taxpayers are lucky state lawmakers failed to pass

Illinois lawmakers got creative with state budget proposals to overhaul pensions and raise new revenue, many of which would have hit consumers and small businesses hardest. They also failed to intrude on how families choose to educate their children.

Illinois lawmakers passed a $55.2 billion budget with record spending, and some tax hikes and fund abuses, but they had five much-worse options they considered that taxpayers should be thankful failed.

Chicago area residents were the biggest winners because they had the most to lose. The lawmaker ideas that died included:

• Hiking tolls.
• Expanding sales taxes to services.
• Taxing home deliveries and digital ads.
• Expanding pensions for state workers hired since 2010.
• Regulating homeschools and collecting personal info on private school families.

Toll hikes

Lawmakers originally proposed a 50-cent toll road hike, capped at $1 per vehicle per day, a 10% tax on ride-sharing services and electric-vehicle charging fees. Illinoisans already pay more than $6 billion in transportation taxes and fees. Reversing the population drain to attract more people to live and drive in the state would be a simple way to get more revenue rather than asking existing Illinoisans for more.

Service sales tax expansion

Illinoisans avoided a $2.7 billion proposal expanding the state’s sales tax to services. That would have applied Illinois’ 6.25% statewide sales tax to services such as:

• Streaming services including Netflix and Spotify.
• Rideshare services such as Uber and Lyft.
• Haircuts.
• Gym memberships.
• Car washes and car repair.
• Plumbing.
• Electrical repairs.
• Landscaping.

Digital ads tax and delivery taxes

To address a projected $1.2 billion budget shortfall, groups were pushing a tax on all deliveries such as Amazon packages or DoorDash food deliveries and a 10% tax on digital ad revenue from companies earning over $150 million, projected to generate up to $895 million. The tax would have increased costs for advertisers and been passed on to consumers. The delivery tax would have added new charges on food or goods delivered to homes.

Tier 2 pension expansion

One of the biggest debates centered around Tier 2 pensions, the benefits system for government workers hired after 2010. The proposed Senate Bill 1937 would have allowed workers to retire earlier with fewer penalties, made pensions more generous based on higher salary years and raised the maximum salary that counts toward pension benefits. It would have added more than $64 billion in pension costs.

Homeschool Act

House Bill 2827 would have required all homeschools and private schools in Illinois to provide names and addresses of every student attending. The bill and an amended version together generated more than 60,000 public declarations of opposition on the Illinois General Assembly’s website.

For all the noise in Springfield, not much has changed except state leaders have boosted spending by $16.7 billion just since J.B. Pritzker has been governor. Lawmakers could come back to Springfield during the summer and pass some of the tax hikes that failed to gain traction before the legislative session ended, but those require a three-fifths majority and more political will.

The 2026 budget has more taxes, more spending and still no real solutions. Illinois’ core challenges, unsustainable pension costs and irresponsible spending, remain unresolved.