Illinois Policy Institute: Roadmap to stop looming $21B in deficits 
‘Illinois Forward 2027’ offers spending caps, rightsizing government, pension reform and pro-growth policies to put Illinois on a sustainable fiscal path

CHICAGO (Feb. 12, 2026) – After years of rapidly rising government spending, Illinois faces a growing fiscal crisis that threatens the state’s long-term economic health.

Illinois is projected to face nearly $21 billion in budget deficits during the next five years, with expenditures growing by nearly 20% while revenues grow by only 11%. There is an alternative.

To address Illinois’ ongoing fiscal challenges, the Illinois Policy Institute released “Illinois Forward 2027” – a comprehensive plan to restore fiscal responsibility, stabilize the state budget and promote long-term economic growth without relying on higher taxes.

The institute’s recommendations would immediately cut $3 billion in wasteful spending, eliminate the state’s budget deficit and create a surplus of $812 million in 2027. It would ask lawmakers to commit to no more pet projects and tax hikes.

Since taking office, Gov. J.B. Pritzker has increased state spending from $40.3 billion to $55.1 billion – growing more than any of the four prior state governors in terms of dollars – and outspending inflation.

“Illinois’ fiscal problems stem from spending decisions that have outpaced what taxpayers and the economy can support,” said Tom Demmer, senior fellow at the Illinois Policy Institute and former deputy House Republican leader. “Without structural reforms, lawmakers will continue to rely on higher taxes, debt and budget gimmicks that undermine economic growth and push residents and businesses out of the state.”

“Illinois Forward 2027” proposes common-sense reforms to rein in spending and strengthen Illinois’ economy, including:

• Establishing spending caps: Limit growth in state spending by tying future budgets to the state’s average nominal GDP growth, ensuring the government grows no faster than taxpayers’ ability to pay.
• Rightsizing government spending: Reduce the state’s elevated spending baseline by eliminating pork projects and returning agency spending to sustainable, pre-pandemic growth levels.
• Reworking state employee health care costs: Address rising state employee health insurance costs by aligning benefit contributions more closely with private-sector norms.
• Pension reform: Reduce Illinois’ massive unfunded pension liabilities by reforming future benefit growth, offering pension buyouts and preventing new proposals that would dramatically increase pension debt.
• Pro-growth economic reforms: Promote job creation and economic growth by reducing occupational licensing barriers, expanding apprenticeships, opting into the Federal Scholarship Tax Credit program and lowering Illinois’ high corporate tax burden.

Illinois’ 2026 spending included more than 2,800 pet projects of at least $200,000 each, totaling $4.5 billion. Examples include $40 million for a sports complex at the alma mater of Illinois House Speaker Chris Welch, as well as funding for floating museums, pickleball and tennis courts, NASCAR operating expenses, pig relocation and centers to “rethink” capitalism.

“‘Illinois Forward 2027’ offers a path to restore fiscal discipline while strengthening Illinois’ economy,” said Ravi Mishra, policy researcher at the Illinois Policy Institute. “By rightsizing government, cutting out pork projects and adopting pro-growth reforms, Illinois can move away from short-term budget fixes and tax hikes and toward long-term stability.”

To read the full “Illinois Forward 2027” plan, visit illin.is/Forward2027.

For bookings or interviews, contact media@illinoispolicy.org or (312) 607-4977.