Illinois Insights Special Edition: 2025 Budget Address Recap

Gov. Pritzker Gives 2025 Budget Address 

On Wednesday, February 19, Governor J.B. Pritzker delivered his seventh annual Budget Address to a joint session of the General Assembly, where he unveiled his $55.2 billion FY26 Executive Budget – marking an approximately $2 billion increase over the current fiscal year budget.

The state projects $55.4 billion in FY26 General Funds revenue, with an estimated $218 million in budgetary surplus. This projection is $1.5 billion higher than the state’s earlier estimate. As a result, Governor Pritzker’s budget team now faces a $1.7 billion deficit, nearly half of the $3.2 billion shortfall projected in November. His administration is also seeking legislative approval for a $550 million supplemental bill.

Governor Pritzker emphasized his commitment to fiscal responsibility while investing in key priorities to grow the state’s economy. The plan increases funding for early childhood, K-12, and higher education, expands resources for health and human services, and strengthens public safety efforts.

For more information, please see the proposed executive budget and press release about the address. Below are some of the highlights of the governor’s budget proposal.

Education

Governor Pritzker emphasized education as a core priority, highlighting the progress Illinois students have made. He pointed to gains in eighth-grade reading and math scores on the nation’s report card in 2024, as well as record-high high school graduation rates. “I believe in building on what works,” Pritzker said, reaffirming his commitment to evidence-based funding that prioritizes underfunded schools. His budget proposal includes:

• $350 million increase in evidence-based funding for K-12 schools.
• $85 million to accommodate rising participation in the Child Care Assistance Program.
• $748 million to sustain investments in the ISBE Early Childhood Block Grant.
• $15 million for the Pipeline for the Advancement of the Healthcare (PATH) Workforce Program.
• A proposal to allow community colleges to offer four-year Baccalaureate Degrees in high-demand fields such as nursing, advanced manufacturing, and early childhood education.

Economic Development

Governor Pritzker highlighted the importance of expanding Illinois’ economic foundation, emphasizing the state’s strengths in workforce talent and innovation. He underscored the success of recent efforts to attract private sector investment and the need to build on that momentum. “Economic growth is an essential ingredient that allows us to move beyond a challenging budget year like this one,” Pritzker stated.

To further drive economic development, the FY26 budget includes a $500 million investment in site readiness initiatives to make more locations across Illinois business-ready. This includes:

• $300 million for the new CMS Surplus to Success program, repurposing idle state-owned properties for economic development.
• $200 million for the Department of Commerce and Economic Opportunity (DCEO) to expand its Site Readiness initiatives.

Housing

Governor Pritzker acknowledged that housing affordability remains a major challenge in Illinois, citing supply chain disruptions, high interest rates, and a declining housing inventory that has outpaced the national average. “That’s got to change,” he stated, highlighting his administration’s efforts, including the appointment of a Director of Housing Solutions and the creation of an advisory committee to propose reforms. Now, he is calling on the General Assembly to implement these recommendations to unlock new financing, attract investment, and remove barriers to housing construction.

As part of the state’s broader housing investment strategy, the proposed FY26 Home Illinois appropriation request totals $282.7 million, including:

• $91.5 million for the One System Initiative, supporting shelters and services for homeless populations.
• $62.3 million for supportive housing, homelessness prevention, shelter diversion, racial equity initiatives, and legal assistance.
• $50 million for court-based rental assistance.
• $42 million for emergency and transitional housing.

Healthcare

One of Governor Pritzker’s key proposals is the Prescription Drug Affordability Act, aimed at addressing the rising costs of prescription medications in Illinois. A central focus of the initiative is to reign in the practices of Pharmacy Benefit Managers (PBMs), who Pritzker described as the “middlemen” of the healthcare system, driving up prices for patients, healthcare providers, and independent pharmacies.

The Prescription Drug Affordability Act seeks to reduce drug costs for Illinois residents by hundreds of dollars per year on average, while also protecting independent pharmacists from unfair pricing practices. Additionally, the proposal grants the Illinois Department of Insurance full authority to examine the financial records of PBMs and require them to submit to annual audits and reporting. Pritzker’s plan aims to eliminate the overcharging of essential medications, from insulin for diabetics to chemotherapy for cancer patients, making healthcare more affordable and transparent for Illinoisans.

Casino Table Tax

As part of his revenue plan, Governor Pritzker aims to raise $100 million by applying graduated tax rates to casino table games, aligning them with the existing tax structure for slot machines. This move seeks to generate additional revenue by taxing games such as blackjack and craps at higher rates. The tax structure for table games was previously eased under the 2019 gaming expansion.

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