Illinois Legislature passes record-high $55.1 billion budget

SPRINGFIELD, Ill. (WTVO) — Illinois legislators passed a record-high $55.1 billion state budget early Sunday.

“The passage of the FY26 balanced budget is a testament to Illinois’ fiscal responsibility,” said Governor JB Pritzker. “Even in the face of Trump and Congressional Republicans stalling the national economy, our state budget delivers for working families without raising their taxes while protecting the progress we are making for our long-term fiscal health. I’m grateful to Speaker Welch, President Harmon, the budget teams, and all the legislators and stakeholders who collaborated to shape and pass this legislation. I look forward to signing my seventh balanced budget in a row and continuing to build a stronger Illinois.” 

Democrats, such as Sen. Laura Ellman (D-Naperville), said, “This budget allocates investments in priority areas – putting Illinois on the right path to fiscal responsibility and meeting fiscal obligations. We are continuing our commitment to evidence-based funding and education, significantly support Medicaid access, preserving employee pensions and wages, as well as furthering the economic health of our state through investments in our workforce programs and state infrastructure.”

Critics, including the Illinois Chamber of Commerce, say the budget includes more than $350 million in new taxes, including corporate income tax increases, gaming taxes, short-term rental taxes, nicotine taxes, telecommunication taxes, and increased fees.

“Starting January 1, 2026, customers would pay a delivery tax on most deliveries to their homes — $1.50 at a time,” Sen. Dave Syverson (R-Cherry Valley) said. “It’s a regressive tax that would hit working families, seniors, people who simply can’t afford a car and those on fixed incomes the hardest. For families just trying to make ends meet, it would be yet another burden they didn’t ask for.”

The budget contains funding for the Rockford to Chicago passenger rail service, redevelopment of the Singer Mental Health Center, allow Stellantis flexibility to reopen the Belvidere Assembly Plant, and includes increased funding for local K-12 schools, according to Sen. Steve Stadelman (D-Rockford).

The budget allows $500 million in funding for site readiness initiatives, including the Surplus to Success program, which will be used to make state-owned sites, such as the abandoned Singer mental health hospital, “shovel ready” for new development.

The plan secures $275 million from the Capital Investments program for the Rockford to Chicago rail project, which is expected to be operational by 2027.

The announced plan was to run two trains, seven days a week. The trip to Chicago is expected to take 95 minutes. The location of the station will be on South Main Street, just south of downtown, on the Union Pacific line.

IDOT said the line will connect Rockford to Chicago, Milwaukee, St. Louis, Carbondale, and twenty other communities in between.

Additionally, the budget includes enhancements to the Advanced Innovative Manufacturing for Illinois Tax Credit and the Reimagining Energy and Vehicles (REV) programs to include additional supply chain industries for electric vehicles.

The budget doubles the Illinois Child Tax Credit to $600 per child for eligible families with children under the age of 12.

Scholarships and grant funding through MAP grants will increase by $10 million to $771.6 million annually. Operating funding for pubic universities and community colleges will increase $44 million, and the state will maintain $748 million in annual spending for Smart Start Early Childhood Block Grants, which has created 11,000 new preschool seats in the last 2 years.

A new Prescription Drug Affordability Fund will use $25 million for pharmacy benefits, while the Medical Debt Relief Program will use $15 million to pay down medical debt for Illinois residents. The budget allows $24 million for reproductive health initiatives, including abortion, which includes $10 million for a public hotline. Additionally, the budget expands abortion rights by shielding Illinois abortion providers from punishment for providing services to college students.

The budget also plans to streamline college admissions by proactively offering admission to Illinois public universities based on academic performance.

The state will spend an additional $46 million on gun violence reduction programs.

“We’ve delivered another balanced budget that addresses Illinois’ challenges head on, while maintaining fiscal responsibility. I’m proud to support a budget that does not raise income or sales taxes, supports working men and women and boosts economic development in the Rockford-Belvidere area,” said Stadelman.

An analysis from the Illinois Policy Institute showed the budget will implement a $43 million property tax hike by cutting the Property Tax Relief Grant; divert $171 million in gas tax revenue from the Road Fund to pay state employee healh care, and create $394 million in tax increases.

“As a result, the budget will push Illinois’ nation-leading property taxes even higher and worsen the state’s fiscal standing. The budget also increases pension benefits for public sector workers by more than $13 billion, yet at the same time shorts the state’s annual pension payment by over $5 billion, according to the plans’ actuaries. These decisions put retirements at risk, especially if the market sees another significant downturn,” said Illinois Policy Institute’s fiscal and economic analysis director Bryce Hill.

Rep. John Cabello (R-Machesney Park), said state Democrats chose to fund projects in their own district, and give millions in taxpayer funder benefits for undocumented migrants at the expense of families, small businesses, and law enforcement.

“This budget doesn’t reflect Illinois values—it reflects bad governance,” said Cabello. “Every dollar spent on enabling Illinois’ financial crisis is a dollar taken away from the law-abiding Illinoisans who pay their taxes, play by the rules, and now feel abandoned by their government.”