Illinois House takes up $53B state budget, including Gov. Pritzker initiatives

SPRINGFIELD, Ill. -- The Illinois House has taken up the state budget Tuesday after the Senate approved the $53.1 billion plan.

Gov. JB Pritzker got most of what he asked for on his budget wish list, which included funding for Smart Start Illinois. That's an initiative which would allow the state to provide universal preschool by 2027.

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It also includes $182 million that would go toward covering costs related to the migrant crisis until the end of the year.

There is another $440 million for Medicaid-like benefits for non-citizens.

When it comes to the grocery tax, that 1% tax is expected to be eliminated in January of 2026, which is good for shoppers, but municipalities that get those funds will not see that money coming in.

Meanwhile, when it comes to tax increases, one of them includes a huge hike on the sports wagering tax for sports book operators like Draft Kings.

Sports betting in Illinois was very lucrative last year, when the tax rate was only 15%.

But, now, lawmakers want to change it to a graduated rate that tops out at more than double that: The goal is $200 million in tax revenue.

The rate would range from 20 to 40%, depending on annual revenue.

That plan has the industry up in arms.

The president of the Sports Betting Alliance said the plan "would make Illinois sports betting tax the second highest in the country and counterproductively penalizes sports betting operators who invested millions into the local economy and created jobs in the state."

The budget also includes a cost of living pay raise for lawmakers.

It provides another $350 million for school funding across the state, as well.

But lawmakers had no appetite to consider the demand by Mayor Brandon Johnson that Chicago is owed another billion dollars.

"It wasn't that we did not want to invest more money in Chicago Public Schools. We have a formula, where we invested additional monies in that formula, based on the schedule that's there," said state Sen. Elgie Sims, Senate budgeteer.

There was no money for the Chicago Bears' proposed new lakefront stadium: another setback for something Johnson supported.

"President Warren, the Bears organization will continue to engage Springfield, and I'll continue to engage the people of Chicago," Johnson said during an unrelated news conference Tuesday.

Democrats are calling the state budget fair, while Republicans say the governor is using taxpayers as a piggy bank.

But, it will likely pass without changes.

The fiscal year 2025 spending plan, which came together over a stretch of late nights and closed-door dealmaking, spends $400 million more than what Pritzker proposed in his February budget address.

Despite controlling the governor's mansion and both chambers of the legislature, Democrats had a rocky time coming to an agreement, as evidenced during floor debate of the bill. In a rare move, a few Democrats publicly aired their disappointment with their party's budget priorities before ultimately voting for it, while a pair of Democrats quietly voted no.

"I wish this were a perfect budget," said Sims, D-Chicago, before the vote. "I've been here many years and I have yet to see one. But...this budget is fair, it's balanced, and it provides certainty for us investing in our future."

The budget, which is set to take effect on July 1, would increase spending by 5% from last year's enacted budget, but just 1.6 percent when factoring in supplemental spending for the current year. It also reduced spending in several areas from Pritzker's February budget proposal by a total of about $73 million, according to Sims, although Democrats did not provide a list of the cuts.

The plan would also send $198 million to the state's "rainy day" fund and make the full pension payment required by law.

The budget also includes a child tax credit for qualifying children under the age of 12, providing parents a credit of 20% of the state's Earned Income Tax Credit in calendar year 2024 and 40 percent in 2025. That would come at a cost of $50 million in FY25 and $100 million the following year, up from the $12 million proposed by Pritzker.

It gives additional money for youth employment programs, as well.

The spending plan passed on a 38-21 vote, with Democrats Patrick Joyce, D-Essex, and Suzy Glowiak-Hilton, D-Western Springs, joining Republicans in opposition. A third Democrat, Sen. Meg Loughran Cappel, D-Shorewood, later voted against a revenue bill that raised certain taxes.

Republicans accused Pritzker of being driven by presidential aspirations and criticized him for growing state spending by about $13 billion since his first year in office in 2019.

"But today, I'd like to say that Governor Pritzker is keeping his promise," Sen. Sally Turner, R-Springfield, said during floor debate. "He's keeping his promise to raise taxes on Illinois citizens by a billion dollars a year to fund the migrant crisis that he's created."

But the GOP also criticized Democrats for underfunding state and federally mandated programs at K-12 schools by $135 million from what the state education board requested. And they panned the governor for allocating about 17 percent less than the current year to the Prisoner Review Board.

"I'm a little confused," Sims said during floor debate. "Because I couldn't really understand if you want more spending or less."

Some Democrats also lamented that "finite resources" prohibited greater investments in youth-focused programing.

"While I rise to acknowledge there are incredible things inside of this budget, many good things, I cannot - my conscience won't allow me to sit in this seat and not lift up the fact that we have not gone far enough for a particular group, which are young, poor, Black people and Latinos," Sen. Willie Preston, D-Chicago, said.

The budget includes a $1 per hour increase in wages for direct service professionals in community-based settings that serve individuals with intellectual and developmental disabilities. Community Care Program workers who serve older adults who can't live independently will see a rate increase as well.

Revenue changes

The budget anticipates $53.3 billion in revenue for the fiscal year that will begin on July 1, about $1.2 billion of which comes from various tax code changes.

The revenue plan was part of why the spring legislative session went beyond Democrats' May 24 self-imposed deadline written into the calendar months ago, as powerful Statehouse lobbying groups lined up against some of its components. But ultimately, it tracks closely with the governor's proposal.

"Every session I found has its own rhythm and each budget is its own beast. And this one was a doozy," Senate President Don Harmon, D-Oak Park, said just before the Senate adjourned. "There is no doubt about that."

It extends a cap on corporate net operating losses to generate $526 million.

Pritzker had also sought a $1,000 monthly cap on the "retailers' discount," which was included in the plan. The discount allows retailers to keep 1.75% of the sales tax they collect but capping it at $1,000 monthly would bring in $101 million for the state's general fund. Third-party "re-renters" of hotel rooms will also be subject to the existing hotel tax under the plan.

To appease retailers, lawmakers included a prohibition that bans financial institutions and credit card companies from charging fees on the sales tax portion of electronic transactions.

The personal income tax was not affected by the law, as the approved budget didn't decrease the standard deduction claimed by millions of Illinoisans, as Pritzker had proposed in February.

The budget package also calls for transferring $150 million from the state's Road Fund to public transit expenses, freeing up general funds for other purposes in a move that was opposed by the state's road builders.

The revenue proposal would also create a $5 million tax credit program for news outlets beginning in 2025 and claimable the following year, providing $15,000 per employee for certain newsrooms and another $10,000 for new hires. Another $50 million from the little-used Leaking Underground Storage Tank fund will be directed to public transit spending as well.

The House has a long day ahead.

Because of procedural requirements, they have to have a second and third reading of the budget before holding a vote, and those have to be done on separate days.

They're expected to stay until after midnight to get the budget passed.

Hannah Meisel and ABC7 Chicago's Jessica D'Onofrio and Craig Wall contributed.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of print and broadcast outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.