Pritzker’s $1.5B wish for cash quickly vanishes
The latest forecast from the Illinois General Assembly estimates Illinois will have $737 million to $1.2 billion less in revenue than Gov. J.B. Pritzker hopes to spend.
Illinois Gov. J.B. Pritzker’s record fiscal year 2026 budget was propped up by $1.5 billion in extra projected revenue and nearly $500 million in “revenue adjustments,” but just weeks later another projection puts his budget in a hole as deep as $1.2 billion.
The latest forecast from the Illinois General Assembly’s Commission on Government Forecasting and Accountability estimates baseline state revenues will come in $737 million lower than Pritzker claimed in his 2026 budget proposal last month. This revenue shortfall will grow to more than $1.2 billion if other “revenue adjustments” proposed by the governor do not come to fruition.
The primary differences come from the Governor’s Office of Management and Budget’s highly optimistic projections for growth in baseline tax revenues compared to the more modest projections from the state legislature’s forecasters. The governor is relying on tax collections from personal income taxes to come in $414 million higher, corporate income tax collections to be $370 million higher, and sales tax collections to grow by $187 million more than what the commission is currently estimating. In total, baseline revenue estimates from the legislature’s commission are $737 million lower than what the governor assumes.
Making matters worse, the governor’s 2026 budget proposal also relies on a series of “revenue adjustments.” They include a delinquent tax payment incentive programs, tax hikes on casinos outside of Chicago and skipping transfers from the state’s General Funds to the Road Fund – a questionable ploy because state statute dictates the transfers.
Pritzker is proposing a series of delinquent tax payment incentive programs in an effort to add $198 million in state tax collection in fiscal year 2026 across the state personal and corporate income taxes as well as the state sales tax. His estimates are based on the performance of a similar program that was in place during fiscal years 2020 and 2021, which generated an additional $208 million for the state over those two years combined. While the governor is calling his estimate “conservative,” the underlying conditions are vastly different from the previous program.
The previous delinquent tax payment incentive program ran for two fiscal years and was able to collect an additional $208 million. But the governor now expects his program can raise $198 million, nearly the exact same amount, in just one fiscal year.
Additionally, the economic conditions of the state have changed dramatically since the previous program was in place. During 2020 and 2021, state tax revenues accelerated rapidly, as the economic rebound from the COVID-19 downturn and massive amounts of government stimulus pushed economic growth far beyond expectations. That likely increased the funds businesses and individuals had on hand to pay delinquent taxes. Now Illinois’ economic growth is expected to slow in the coming year, with the total number of jobs in the state projected to decline during 2026, according to S&P Global.
Given this expected slowdown in the economy, it may be unlikely individuals and businesses will have the capacity to take advantage of the delinquent tax payment incentives to the extent Pritzker is projecting.
Pritzker is also pushing for a $100 million tax hike on Illinois’ 15 casinos outside of the city of Chicago. While Pritzker promised he would avoid tax hikes in the days before his budget proposal, this promise was promptly broken.
The proposed tax change would increase the tax rate on table games dramatically, more than doubling the top tax rate. Currently, table games are taxed at a rate of 15% on the first $25 million in adjusted gross receipts and 20% on any amount above $25 million. Under the new structure, tax rates on adjusted gross receipts above $25 million from table games would be subject to tax rates ranging from 22.5% to 50%.
Lastly, the governor is also suggesting skipping statutory transfers of the state sales taxes on motor fuel and gasohol to the Road Fund. Illinois is statutorily required to transfer $171 million worth of receipts from these taxes from the General Fund to the Road Fund in 2026 to finance building and maintenance of roads, bridges and other transportation facilities across Illinois. Pritzker is proposing to skip that payment to fund his spending increases. The “pause” is a one-time budgeting gimmick designed to boost General Fund revenues in the coming year at the expense of future budgets, when these transfers will have to be made up.
Rather than relying on hopeful revenue estimates, tax hikes and budgeting gimmicks, Illinois lawmakers should reject Pritzker’s budget approach for a more sustainable plan. The Illinois Policy Institute has proposed an alternative budget plan that would bring long-term financial stability to the state and foster an environment in which families and businesses can thrive.
Most importantly, these proposals don’t rely on any magic growth in state revenues or new taxes to balance the 2026 budget.