Vallas: Pritzker signs a budget giving Illinois tax hikes, higher spending

Eight years of the governor’s budgets have exposed the cost of spending-driven budgeting and repeated tax hikes.

Gov. J.B. Pritzker claims the budget he signed Tuesday is balanced, fiscally responsible and “laser-focused” on making life more affordable for Illinois families.

In reality it’s another “Pritzker Two-Step” budget: increase spending, then raise taxes and sweep dedicated revenues from other funds to fill another big budget gap.

This is why Illinois residents pay the highest combined state and local tax rate in the country.

The fiscal 2027 budget, awaiting Pritzker’s signature, does not solve Illinois’ underlying structural problems. The core issue is that the state’s revenue base is not growing fast enough to support its spending commitments, and much of the new revenue has come from tax hikes and fund sweeps rather than sustained economic growth.

Addressing that revenue imbalance will require moves including restraining spending growth and strengthening the private economy.

  Experts have repeatedly warned that Illinois remains in deep economic trouble, regardless of how aggressively the governor spins his record.

• Economic underperformance: Illinois’ real GDP has grown 7.9% since 2019, compared with 17.6% nationally, placing the state 46th among 50 states.
• Unemployment: Illinois ended 2025 with nearly 302,000 unemployed residents, while the state’s April 2026 unemployment rate was 5.1%, one of the highest in the country.
• Residents leaving: Illinois has lost a net 1.6 million people to domestic outmigration since 2000, trailing only California and New York. Roughly half of Illinois counties have lost population, and despite the influx from international migration, Chicago’s population is at its lowest level in a century.
• Losing young, wealthy people: In 2022, Illinois ranked second in the loss of people 26 to 35 earning over $200,000 and third among ages 35 to 45 at that income level.

Illinois anemic performance shouldn’t surprise anyone. Pritzker has presided over at least 63 tax and fee increases, taking over $77 billion in the process. This has all come at a time when Illinois governments received some $54 billion of federal COVID pandemic relief, including $14 billion for state government operations. Pritzker’s COVID response kept schools and businesses closed longer than those in other states, and has lagged economically since the pandemic.

Most surprising is that despite this massive infusion, local property taxes have risen dramatically. Since 2019, total state property taxes have grown by $8.57 billion, or 27%.

Illinois residents were slated to pay the highest combined state and local taxes in the nation last year, at more than 16.5% of annual income. Illinois also carries some of the worst debt burdens in the country. The state has $15,804 in unfunded public pension liabilities per person, the highest in the nation, with total unfunded liabilities of roughly $218 billion. Pritzker recently added another $11 billion in Chicago pension debt, bringing the city’s obligations to $53 billion.

As for Pritzker’s publicized population gains, they have been driven heavily by immigration. The state and Chicago’s response to new arrivals has also brought a significant financial burden, with the city and Illinois spending billions on new migrants and migrant-related services.

Meanwhile, domestic outmigration continues. It’s been especially severe in Chicago, which has seen an exodus of roughly 265,000 Black residents since 2000, mostly working- and middle-class families with school-age children, because of unsafe neighborhoods, heavy tax burdens and a lack of economic opportunity.

The departures are no surprise. Despite Illinois’ progressive rhetoric about equity, the state continues to lag badly on measures of equity and mobility. In a study using eight measures of prosperity and 2024 data, Illinois ranked last in the nation in inequality between Black and white U.S. residents.

These trends are not an accident. They are the result of policies that have made Illinois less affordable, less competitive and less attractive to families and employers, despite record spending and government growth.

After eight budgets, Pritzker can no longer blame his predecessors, the pandemic or outside circumstances for Illinois’ economic and fiscal shortcomings. His tenure has followed a familiar pattern: Spending grows, taxes and fees rise, and temporary revenues are used to paper over structural deficits.

The fiscal 2027 budget is the latest example of an approach that spends beyond the state’s means while leaving taxpayers to pick up the tab.