Illinois lawmakers pass Gov. JB Pritzker's $56 billion 2026 budget, largest in state history

The Illinois General Assembly approved Gov. JB Pritzker's nearly $56 billion budget for the upcoming year early Monday morning.

While Democrats applauded the passage, Republicans said the budget included too many tax increases and will hurt Illinois families.

Republicans also called the spending plan irresponsible, as it is the largest budget in Illinois history.

The $55.9 billion budget does not increase state income taxes or sales tax. The spending plan included an $830 million supplemental current-year spending plan, meaning the upcoming fiscal year 2027 budget is essentially flat.

To get it across the finish line, Democrats — especially progressives — had to temper their expectations. Many had called for new progressive revenue measures throughout the session, including taxes on big corporations and billionaires and for Illinois to untie itself from parts of the federal tax code.

Instead, the measure freezes corporate net operating loss and enacts taxes on social media companies, digital assets, fantasy sports, tobacco and sports betting on prediction market websites.

The budget does include more than $300 million new dollars for public education, and almost $100 million for families struggling to eat. There is also a sales tax holiday on school supplies when families go back-to-school shopping in August, and pauses a previously planned increase to the state gas tax.

Republicans said the relief didn't go nearly far enough.

"We're not going to raise the gas tax in July, we're just going to wait a couple more months, so we can raise it at the end of the year after election time," said Rep. Joe Sosnowski (R-Rockford), adding sarcastically that there was a "lot of courage coming out of that side of the aisle and the governor."

Republicans argued the budget relies too heavily on tax hikes, and could place a greater financial burden on Illinois families. 

"Our budget has increased at less than the rest of inflation since I took office," Gov. Pritzker said, responding to criticism that it's the largest budget in state history. "I warned that there would be truly unprecedented challenges because Donald Trump and the Republican congress are cutting the state over $8 billion."

Republican State Senator Don DeWitte (R-St. Charles) said while many of the new taxes involve businesses, it will have a trickle-down effect to the average taxpayer.

"Business takes all expenses involved in running their businesses, and they wash those expenses out over what they charge in fees, advertising fees, transaction fees. The taxpayer is ultimately who gets stuck paying those increases because of how business simply operates," he said. 

Tax increases and revenue maneuvers

The budget also calls for transferring $150 million in sales tax revenue from gas to the General Revenue Fund once public transportation is fully funded, opening that revenue up to be spent on any purpose.

"If you're a driver who is irritated by the high price of gas that you're paying, you should be extra irritated when you where the funds are going," Spain said.

Sen. Chapin Rose, R-Mahomet, aired similar concerns earlier on Sunday during committee.

"We ought to be suspending the sales tax on motor fuel right now – not diverting it to the General Revenue Fund, and not diverting it, oddly to the exact same dollar amount that we got for illegal immigrants and welcoming centers," he said.

That state plans to spend $143 million on a healthcare program for undocumented immigrant seniors and another $4 million on welcoming centers that provide services to immigrants arriving in Illinois.

Lawmakers incorporated a pair of the tax changes that Pritzker had proposed in February. One would lower the cap on corporate net operating loss deductions for business. Another would impose a tax on social media companies based on the number of users the platform has in Illinois. Combined, those would generate $500 million in new revenue.

Social media companies would be taxed on a progressive scale starting with platforms with 100,000 to 499,999 users paying 10 cents per month for each user all the way up to platforms with at least 1 million users paying a $165,000 fee plus 50 cents for each user each month. A similar tax in Chicago is already tied up in court.

New taxes on digital asset sales and fantasy sports are expected to generate $65 million. The state would create a licensing structure for fantasy sports operators and impose a 15% tax on each business — something Rep. Curtis Tarver, D-Chicago, said the industry themselves requested.

Consumers purchasing tires will also see a 50-cent increase in a tax on those purchases, which primarily funds a waste disposal fund.

Sports bets on prediction markets and remote tobacco retailers would also be taxed under the plan.

The revenue package also creates a Targeted Advertising Services Tax, which is more commonly known as a digital ad tax. However, lawmakers expect the tax will also face legal challenges and are not planning to gather revenue from it in FY27. Tarver said the goal was to create a framework to implement the tax later if it's held up in court. Keith Staats, president of the Illinois Taxpayers Federation, told a House committee the tax likely violates federal internet freedom laws.

The budget package does not eliminate tax incentives for data centers, despite Pritzker calling for it in his budget.

Other spending in the budget appears to rely on numerous fund sweeps that redirect money from one program to another or to the state's General Revenue Fund. One of those sweeps includes transferring $70 million from the BRIDGE program — created last year to allow Pritzker to allocate funding to programs that fall short in funding because of federal cuts ­— to the Fund for Illinois' Future for

infrastructure projects and other grants. Money in that fund is typically earmarked for specific projects in Democratic legislative districts.

However, the spending bill stipulates that $70 million from the BRIDGE Fund should go to a new program to fill gaps in food assistance programs, which led to some confusion among lawmakers debating the bill in the House.

Classroom cell phone ban

The General Assembly also approved a bill banning the use of cellphones in classrooms. The legislation amends the current school code to require a "bell-to-bell" ban on cell phones for K-8 students. High school students get more flexibility during lunch and passing periods.

The ban does not include school-issued devices used for education purposes, and includes exceptions including cell phone usage related to medical needs, education plans, English learner support and student caregivers.

Schools cannot use penalties like fees, fines, suspensions, expulsions or police involvement to enforce the policy.

Pritzker said he will sign the bill into law.

Lawmakers also passed a bill to shield abortion information from digital medical records. The Reproductive Health Records Privacy Act allows patients to choose whether abortions or gender dysphoria diagnoses are in their digital medical records.

The legislation could have major implications for those who travel to Illinois for care.

In a post to X, Gov. Pritzker said the bill will "ensure that patients retain full control over their health information."

Data center legislation not voted on

One bill that lawmakers did not address before the end of the Spring Session early Monday morning concerned data centers. Advocates said the POWER Act would curb "unchecked data center development."

The POWER Act was not called to the floor. Advocates said they hoped to get the legislation passed during the Fall Veto Session.

Capitol News Illinois contributed to this report