SPRINGFIELD — Illinois’ latest budget misses the mark in several key areas, according to one independent nonprofit fiscal analyst.
State lawmakers sent Gov. JB Pritzker a $55.2 billion budget on May 31 that raises $1 billion in new revenue and increases spending by more than $2 billion in fiscal year 2026 compared to the current year.
But the head of one of Chicago’s top nonpartisan government research organizations said lawmakers made too many short-term decisions to balance the budget in fiscal year 2026 that could make future fiscal years more challenging.
“It’s an incomplete budget,” Civic Federation President Joe Ferguson told Capitol News Illinois. “It does not add in any meaningful way to discuss any structural issues the state has. It’s a maintenance budget.”
Ferguson said a key reason for that is at least $271 million in fund sweeps used to balance the general revenue fund. Fund sweeps occur when lawmakers dip into lesser-known and underutilized funds outside the main general fund to use as a source of revenue for the fiscal year. This year’s budget also pauses several transfers to keep certain dollars available in the general fund for use this year.
For example, the budget calls for pausing the final transfer of motor fuel sales tax revenue to the road fund. The move would free up $171 million of general fund spending in FY26, but delays putting that money toward road construction projects.
“It’s not balanced on gimmicks,” House Speaker Chris Welch, D-Hillside, told Capitol News Illinois for the latest episode of the “Illinois Lawmakers” program. “It’s balanced based on revenues and expenditures, and it’s based on what we know. We passed a budget based on what we knew at the time, and we weren’t going to pass the budget with cuts alone.”
The FY26 budget would also suspend the monthly transfer to the “rainy day” fund for one year, freeing up $45 million for general fund use.
“It’s absolutely a mistake,” Ferguson said, calling that decision “troubling.”
The “rainy day” fund should continue to grow over time, he said, especially “knowing that we are going to need to go to some last-case resorts in all likelihood when we understand the federal impact and when we approach the transit issues as well, and this was not the moment to go to that well.”
The fund is still expected to grow from interest income and cannabis revenue in FY26.
Lawmakers used some of the fund sweeps to give the governor authority over a new $100 million “emergency” fund to plug unforeseen budget shortfalls.
Pritzker argued at a news conference after the budget passed that the state’s “structural” deficit – or the gap between ongoing spending and baseline revenues – has improved since he took office in 2019.
“We’re diminishing the one-time expenditures that we have to make,” Pritzker said. “So we’ve gotten, really, much closer than ever before to balancing that structural deficit.”
Relying on fund sweeps will only make budgeting more challenging if a crisis arrives, Ferguson said.
“Everyone acknowledges that it is all but certain that there are additional things that are going to need to be attended to in the coming months,” Ferguson said.
An eye on Congress
New action from Congress that punches holes in state budgets, coupled with the state’s public transportation fiscal cliff, could be a wake-up call for lawmakers, Ferguson said.
The U.S. House has already passed a domestic policy plan that would shift more cost of government programs to states, cut Medicaid funding and phase out clean energy tax credits. The Senate is expected to make changes to the legislation, but President Donald Trump wants to sign the bill into law by July 4.
While many components may not hit Illinois’ budget this year, state lawmakers are watching for any changes that could require them to return to Springfield and adjust the FY26 budget.
“We have told the caucus to stand on the ready,” Welch said. State lawmakers boosted spending in the FY26 budget for safety net hospitals and federally qualified health centers, but the state wouldn’t be able to absorb major federal cuts to Medicaid.
“We got some room in there to be able to respond, but it’s hard to prepare when you don’t know exactly what’s coming down the pipe,” House budget leader Rep. Kam Buckner, D-Chicago, said during a news conference Thursday with the Democratic Legislative Campaign Committee.
House Republican Leader Tony McCombie, R-Savanna, was less worried Congress will cut Medicaid and other key benefits.
“After conversations with the Illinois delegation, I don’t feel that there’s going to be any concerns with cuts that are important in our Medicaid budget,” McCombie told Capitol News Illinois.
Last-minute budgeting
Democrats unveiled a more than 3,300-page spending plan about 24 hours before it passed the General Assembly, while the $1 billion tax plan was filed about five hours before lawmakers took a vote.
Ferguson, the Civic Federation president, criticized the legislative process that gives lawmakers and the public little time to review the budget’s contents.
“It was chaotic, nontransparent – nontransparent even to the legislators that had to vote on it – and not really the way that we want to go about this business, especially at a sensitive time,” he said.
A group of conservative lawmakers also contended the process was illegal in a lawsuit filed this week in Sangamon County. The Illinois Freedom Caucus argues that the budget amendments were not read on three separate days in each chamber of the General Assembly, which they say violates the state constitution.
The constitution states a bill “shall be read by title on three different days in each house,” but does not specify that each amendment to a bill receive the same.
Each of the bills were read on three separate days this spring in both chambers, even though the substantial amendment containing the budget was filed in the final hours. For example, the bill lawmakers used to raise $1 billion of revenue was originally filed to establish an Emmitt Till commemorative day. The bill met the three readings requirement in both chambers before the Emmitt Till Day provision was removed in the final hours of session in favor of the tax plan.
The constitution also states that it’s up to the House speaker and Senate president to “certify that the procedural requirements for passage have been met.”
In applying what’s known as the “enrolled bill doctrine,” the Supreme Court has consistently declined to infringe on the legislature’s authority to certify its own bills, due to separation of powers concerns. It has also consistently upheld broad authority for the General Assembly to gut the original contents of a bill and amend it with a new subject, making the lawsuit a long shot.
Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.