Illinois lawmakers approved a nearly $59 billion state budget early Monday morning, enacting new taxes on businesses and authorizing less spending than what Governor JB Pritzker proposed in February.
“It’s allowed us to be prepared for the great reality we face today,” said Senate budget leader Elgie Sims, D-Chicago. “The reality of federal cuts. The reality of chaos coming from Washington … We are not placing blame. We are prepared. We are not acting on fear. We are acting responsibly.”
The new plan ushers in taxes on prediction markets, cryptocurrency and fantasy sports, as well as digital advertising. However, budget leaders aren’t yet counting on revenue from these new taxes, which are certain to face legal challenges. Rather, they expect to get around $200 million from a tax on social media companies.
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Other moves include a redirection of sales tax revenue on sugary beverages to the state’s general fund instead of to capital projects, according to state Rep. Robyn Gabel, an Evanston Democrat and top budget negotiator.
“We’ve constructed a budget that meets people’s most pressing needs, including key investments that allow Illinois to move forward in areas where Washington has chosen to retreat,” Gabel said. “The uncertainty in Washington and the resulting affordability crisis facing families has emphasized our need to be surgical and our approach to building this budget.”
The plan also includes a back-to-school sales tax holiday and pauses a scheduled 1.3-cent gas tax increase for six months. The governor’s office says the budget fully funds the state’s pension obligations and adds $350 million for K-12 education through Illinois’ evidence-based funding formula. The budget also includes funding for housing, health care, food assistance and higher education.
A coalition of progressive Democrats said the plan didn’t do enough “to fully fund quality education, accessible healthcare and reliable public services for every Illinoisan.”
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Republicans, on the other hand, criticized the increase from last year’s $55.2 billion budget and the new taxes.
“They’re loading up their grocery cart literally before they have any idea how much they’re going to spend,” said Senator Chapin Rose, a top GOP budget negotiator from downstate Mahomet.
The budget was passed after a spring session marked by uncertainty because of the war in Iran and federal policy change. Budget analysts for the General Assembly and governor’s office tempered revenue expectations just weeks ago, citing growing pessimism over the economy.
The 3,700-page spending plan and associated implementation bill were introduced in the evening of May 30 and about 200 additional pages were added around 2 a.m. on Monday. But other components of the budget, including the capital and revenue bills, were not filed until mid-afternoon on Saturday.