CHICAGO (Feb. 18, 2026) – Illinois Gov. J.B. Pritzker will address the General Assembly today to present his 2027 budget proposal.

Illinois faces a projected deficit of over $2 billion ahead of 2027. Since taking office, Pritzker has increased state spending by nearly $15 billion – outspending inflation – and has raised state taxes and fees at least 49 times. Residents also now pay $4,030 per person in taxes, up from $2,790 per person when he took office.

Experts from the Illinois Policy Institute are available to comment on the state budget, taxation, pensions and other policy issues. 

What to watch during the budget address:

Progressive taxation: 

• Despite voters rejecting a constitutional amendment in 2020, lawmakers are once again pushing for forms of graduated income taxes. These proposals would put retirees, small businesses and taxpayers at greater risk.
• Lawmakers refiled a bill that would be a first-in-the-world tax on unrealized capital gains that could threaten the state’s ability to provide services. Lawmakers briefly floated this measure as a revenue option during last year’s transit bailout, but rejected the measure.

Pension proposals: 

• Pritzker has proposed several pension reforms. Some positive solutions include expanding buyouts and paying down debt. Others warrant caution, such as delaying full funding and raising the Tier 2 wage cap. Pritzker has not released a revised ramp to show how his plans affect pension contributions long term; they may add millions into payments in later years, which would burden future generations with higher payments.
• Lawmakers moved legislation forward to expand Tier 2 pension benefits for government employees hired since 2011, a change projected to cost taxpayers $52.7 billion long-term. These would not only be fiscally irresponsible and risk credit downgrades, they are unnecessary as lawmakers already fixed the potential Tier 2 problems during last year’s session.

Trump’s economic threats:

• Pritzker has criticized the Trump administration’s changes to the federal business tax that reduce Illinois’ taxable base, lower revenues and cost Illinois roughly $587 million. But compared with the size of the $55 billion state budget and the $2 billion deficit, Illinois’ financial troubles cannot be blamed on the Trump administration alone.
• Illinois’ budget and economic issues began long before Trump. Illinois is the largest state currently considered at “high risk” of a recession.

Budgeting process:

• Unlike other states such as California or Texas, the state’s appropriations committees advance spending proposals without reviewing their long-term costs and tradeoffs. The state passes line items without plans to pay for them, without knowing they’re necessary and often as special pet projects to lawmakers.
• Illinois’ budget is advanced without transparency. Lawmakers need more time to review budgets, multi-year forecasting with independent projections and to include long-term revenue and tax outlooks.

“Illinois’ budgeting process is broken and continues to mask deeper fiscal problems. By complaining about lost money from the federal government, the governor is ignoring the very real influence and control he has over most state budgeting,” said Tom Demmer, senior fellow at the Illinois Policy Institute and former deputy House Republican leader. “The state doesn’t budget like most everyday households do; they just grow spending more every year and fill the gap with tax increases. Achieving long-term stability will require aligning spending with sustainable growth, cutting waste and pursuing structural reforms. It will not come from tax hikes.”

To visit the institute’s ‘Illinois Forward 2027’ plan to balance the budget, visit illin.is/Forward2027.

To watch an interview with Demmer about the Illinois budget, visit youtu.be/MGCJKAcIR1g.

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