Illinois passes $55B budget, with over $800 million in revenue changes

Illinois state lawmakers’ spending plan surpasses last year’s budget by $2 billion, requiring taxpayers to pay over $800 million in additional costs for yet another year of record spending.

With just over 24 hours to conduct a full review, the Illinois General Assembly approved a record-setting $55.2 billion budget for 2026, after a 75-41 House vote sent the 3,000-plus page plan to Gov. J.B. Pritzker. lt follows a familiar fiscal playbook: spend more, fix nothing, hand taxpayers the bill – and toss in a raise for those casting the votes.

To cover the rising costs of education, state pensions and health benefits for government workers, the budget uses short-sighted fixes and ignores structural problems. Once again, it’s taxpayers who will pay the price.

Just before its deadline, Illinois lawmakers passed a record $55.2 billion budget, featuring over $394 million in tax increases, $237 million in fund sweeps and $216 million in delaying funds.

Despite lawmaker claims of budget cuts, the 2026 budget increased by $2 billion compared to 2025. Gov. J.B. Pritzker has grown Illinois’ budget by $16 billion and enacted over 50 tax hikes since taking office in 2019.

Notably, the budget cuts the state’s Property Tax Relief Grant, resulting in an effective $43 million property tax hike. Lawmakers will also receive more than $6,000 in pay raises for the coming year, while public pensioners will receive a benefit spike valued at more than $13 billion. Meanwhile, the budget contributes $5 billion less in pension funding than is necessary to keep the system solvent for future retirees, according to the pension system’s actuaries.

On the revenue side the budget features more than $800 million in revenue gimmicks featuring tax hikes, fund sweeps and temporary measures that fail to truly balance the state’s budget. The process was so rushed that even bill sponsors seem unclear on the exact amount taxpayers will be asked to pay.  Among the revenue adjustments are:

• $195 million – $228 million from a new tax amnesty program.
• $171 million from delaying motor fuels tax revenue transfers to the Road Fund.
• $237 million in fund sweeps.
• $72 million in corporate tax hikes.
• $45 million from shorting the state’s Budget Stabilization Fund.
• $36 million from a new sports wagering tax.
• $15 million from removing hotel tax exemptions from short term rental platforms.
• An additional tax on nicotine analogs.

The 2026 budget continues Illinois’ practice of irresponsible and speculative budgeting. Rather than focusing on policy solutions such as a spending cap, right-sizing employee health care costs and constitutional pension reform, lawmakers have opted for a status quo budget. Constantly relying on taxes and fund sweeps encourages irresponsible budgeting, which erodes voters’ trust in Springfield. These tactics reduce the state’s competitiveness, risk potential credit downgrades and can worsen Illinois’ challenges with high unemployment and sluggish growth.

Illinois’ 2026 budget continues the state’s habit of patching budget problems using short-sighted fixes with long-term consequences. Without structural solutions, such as adopting a spending cap and constitutional pension reform, Illinois has continued its cycle of reactive budgeting at taxpayers’ expense.