Illinois Insights Special Edition: End of Session Recap

Overview

After hours of discussion, procedural maneuvering, and multiple failed vote attempts, Democrats in the Illinois House managed to pass the FY 2025 state budget package around dawn on Wednesday.

The theatrical ending wrapped up a long several days of negotiations on a budget that largely resembles Gov. JB Pritzker’s proposed budget in February.

Despite working five days past their self-imposed May 24 spring session end date, lawmakers were still able to adjourn ahead of a May 31 deadline after which a three-fifths majority vote would be required to pass bills with an immediate effective date.

The $53.1 billion budget is the largest in state history, about a 1.6% increase over last year’s budget, and includes $750 million in tax hikes and other revenue enhancements to balance the spending plan. Overall, state spending grew by about 5 percent from last year’s enacted plan; and the measure spends $400 million more than what Pritzker proposed in February.

Democratic Rep. and Lead House Budgeteer Jehan Gordon-Booth said the budget prioritizes families, businesses, and communities, and she emphasized the spending plan’s focus on education, after-school programs, health, and public safety.

The Democratic supermajority Senate gave first approval of the 3,389-page budget bill (SB 251) Sunday night by a 38-21 vote, with two Democrats – Sens. Patrick Joyce and Suzy Glowiak Hilton – voting against it. Sen. Meg Loughran Cappel joined Joyce and Glowiak Hilton in voting against the revenue plan.

Passage in the House proved to be much more chaotic and strenuous. After about an hour’s worth of debate, the budget bill passed the House 65-45 shortly after 2 a.m. Wednesday, with seven Democrats voting against it. House Democratic Reps. Harry Benton, Anthony DeLuca, Jen Gong-Gershowitz, Katie Stuart, Nabeela Syed, Larry Walsh, and Lance Yednock all voted against the budget, ending a several year stretch of all House Democrats voting for the budget despite internal disagreements.

Following the vote, Pritzker released a statement praising the legislation and saying, in part, that this budget uplifts working families, saves more money in the Rainy Day Fund, creates jobs, lowers taxes on small businesses, and grows the economy.

Next, the budget implementation bill (HB 4959) passed by a more narrow vote of 62-46, with eight Democrats (Reps. Benton, Hanson, Kifowit, Johnson, Scherer, Stuart, Walsh, and Yednock) voting against it and two progressives (Reps. Carol Ammons and Lilian Jiménez) taking a walk.

But when House Democrats tried passing the revenue plan housed in HB 4951, the first vote failed on a 59-50 vote after a verification request confirmed that Rep. Aaron Ortiz was no longer present in the chamber and his vote was removed. A second verification failed after Republican Rep. Randy Frese voted for the bill and then left the room to ensure his affirmative vote would be removed, causing the bill to fail a second time.

Using a series of procedural maneuvers, House Democrats voted to suspend a rule that prevents a failed bill from receiving a third vote. Finally, on the third try and just before 5 a.m., Democratic Rep. Larry Walsh changed his vote to allow the tax hikes to pass 60-47, the minimum number of votes needed to approve a revenue package.

The dramatic session reflected the challenges in trying to maintain party unity within House and Senate Democratic supermajorities that encompass a broad range of ideological and geographic perspectives and priorities, especially during an election year.

However, a look ahead to next year’s budget negotiations indicates that more trouble may be on the horizon given the expected transit and education fiscal cliffs due to federal COVID relief funds drying up. Republicans also gave a foreboding warning that the decision to include tax hikes in this budget instead of spending reform sets up lawmakers for an extremely challenging FY26 budget.

The budget and all other parts of the legislative package now go to Governor Pritzker’s desk and once signed, will take effect on July 1 at the start of the new fiscal year.

Key details on the budget, as well as other notable bills that passed the General Assembly this session, are highlighted below.

Budget/Appropriations

The final budget and its spending plan allocates funding and makes investments in education initiatives, capital projects, and the migrant response.

• Education: The FY 2025 budget includes more than $20 billion for education, with a $350 million increase for the evidence-based funding formula. The budget features an additional $75 million for the Early Childhood Block Grant to fully fund the administration’s Smart Start Illinois program and add 5,000 more seats in preschools across the state. It also allocates $14 million to create the Department of Early Childhood, the new agency that the state legislature voted to create. The FY25 budget also includes a child tax credit for qualifying families with kids 12 and under.
• Migrant response: The budget also includes the $182 million Pritzker committed months ago to provide shelter, health care, and other services for recently arrived migrants, as well as $440 million for healthcare for undocumented immigrants.
• Infrastructure: The budget includes $3.5 billion for infrastructure. That includes $500 million to support the development of a regional quantum information science and technology campus. The legislature also passed a tax incentive package (HB 5005) aimed at companies in quantum computing. The measure also expands and extends several other popular tax credit programs, such as the Reimagining Energy and Vehicles Act (REV) and the Economic Development for a Growing Economy (EDGE) program.
• Pensions: Budgeteers also noted that the budget will fully fund the annual pension obligations and invest in the unemployment insurance trust fund.
• Homelessness: The spending plan allocates $290 million for the Home Illinois program to combat homelessness, a $90 million increase.
• Healthcare: The budget includes $155 million for safety net hospitals. It also allocates $4 million to create a statewide maternal health plan and distribute grants to community-based reproductive health care providers. Additionally, through provisions passed in HB 5290, the budget approves $10 million for the governor’s plan to erase $100 million in total medical debt for Illinoisans. Direct service professionals who serve individuals with intellectual and developmental disabilities in community-based settings will see a $1 hourly increase. Community Care Program workers, who serve older adults who can’t live independently, will also see a raise.
• State prisons: The budget includes $900 million for renovations at state prisons. House Democrats approved the legislation (HB 4582) 72 to 38 that authorizes the state to issue bonds for capital construction projects, including for the tear down and rebuilds of Logan and Stateville prison. The bill needed a supermajority (at least 71 votes) to pass.
• Salary increases: Lawmakers and many top state officials will see 5% raises, boosting annual pay for all 177 members of the Illinois General Assembly, as well as for all constitutional offices, including the governor, lieutenant governor, secretary of state, attorney general, comptroller and treasurer, and heads of executive agencies.

Revenue omnibus

To help pay for the spending, the state is counting on a revenue package of tax hikes to  sportsbooks, retailers, and other businesses.

Sportsbooks will see their current 15 percent tax rate on post-payout revenue increase to a new graduated structure based on annual revenues, with the largest sportsbooks paying a 40% tax and the smallest paying 20%. The change is projected to bring in about $200 million in new operating revenue, about the same as Pritzker’s initial proposal calling for the rate to jump from 15% to 35%.

The tax on video gaming terminals is also being increased by 1 percent and is expected to generate an additional $35 million for infrastructure projects next year.

The revenue plan also caps a tax discount retailers can receive for collecting sales tax at $1,000 monthly, a change that is expected to bring about $101 million for state coffers and about $85 million for municipalities.

Lawmakers were able to mitigate potential pushback from retailers by including a prohibition on financial institutions and credit card companies charging fees on the sales tax and gratuity portion of electronic transactions beginning July 1, 2025.

But the seemingly last–minute decision and first-in-the-nation measure to eliminate credit card fees on the portion of transactions that includes sales tax and tips sent banks, airlines, and credit card companies scrambling to block it. They argued that the prohibition would create a burdensome and expensive implementation process that would threaten privacy and lead to a worse experience for consumers. Their efforts were ultimately unsuccessful, but they warned of potential constitutional problems, including interstate commerce issues, and forthcoming court battles.

Another $25 million in revenue will be raised by closing off a hotel re-renter loophole.

The largest share of the new revenue will come from extending limits on the amount of operating losses corporations can write off on their income taxes, which is expected to generate another $526 million for the state.

Use Tax Act omnibus

Lawmakers also voted 86-20 to eliminate the 1% statewide grocery tax (HB 3144), although the tax will remain in place until Jan. 1, 2026. Municipalities will be able to implement their own grocery tax of up to 1% without a referendum and without requiring fees.

The state’s municipalities will get another $400 million for local road projects as an added benefit.

Labor, Employment & Business

Biometric Information Privacy Act reform

SB 2979 amends the state’s Biometric Information Privacy Act by changing the way liability accrues when violations of the Act occur. Instead of a per occurrence or per swipe basis, liability would accrue on a per person basis. The legislation addresses an invitation to the General Assembly by the Illinois Supreme Court in Cothron v. White Castle Sys., Inc. to review policy concerns and make clear its intent regarding the assessment of damages under the Act.

Worker Freedom of Speech Act

State legislators passed SB 3649, which prevents employers from requiring workers to attend employer-led meetings regarding political or religious matters. Referred to as “captive audience meetings,” these meetings are often utilized as a response to unionization efforts. Employers that violate the Act would be subject to civil penalties.

Consumer Fraud-Fee Disclosure 

Legislation that would force companies to disclose “junk fees” on transactions for goods and services including concert tickets, hotels, and other services did not pass the legislature this session.

The bill (HB 4629), sponsored by state Rep. Bob Morgan and state Sen. Omar Aquino, would have amended Illinois’ Consumer Fraud & Deceptive Business Practices Act to prohibit “hidden and misleading fees” to ensure that prices as advertised reflect the total cost. The bill would have also given the attorney general’s office more authority to punish companies that violate the law.

HB 4629 passed the House 71-35-1 in mid-April but did not get called for a vote in the Senate.

Health Care

Healthcare Protection Act

HB 5395, championed by Gov. Pritzker, is a major healthcare insurance reform bill that lowers cost of insurance, removes barriers to treatment, and enhances penalties on controversial insurance practices from providers within the state. The Act bans step therapy for private insurance and Medicaid providers. The bill also prohibits prior authorization requirements for in-patient adult and children’s mental healthcare.

Additionally, insurers will also be required to maintain up-to-date lists of in-network providers, with internal audits every 90 days. HB 5395 also gives the Illinois Department of Insurance the authority to approve or reject proposed premium rate changes in large-group health insurance plans, a power it already has with small-group insurance plans.

Abortion protections

The Illinois legislature passed HB 581, which allows for abortions to be performed as a viable treatment for patients experiencing life-threatening or altering conditions. The law states that doctors and other providers act in accordance with current federal Emergency Medical Treatment and Active Labor Act (EMTALA), which requires emergency departments to treat and stabilize all patients. The bill also enables the Department of Public Health to investigate and punish hospitals who do not comply.

Artificial Intellgience

Artificial Intelligence protections

The legislature unanimously passed HB 4762, the Digital Voice and Likeness Protection Act. The Digital Voice and Likeness Protection Act requires artists to be represented by a lawyer or union when negotiating with employers or contractors, eliminating the artist’s replaceability with AI-generated content based on their previous work.

The legislature also passed HB 4875, which amends the Right of Publicity Act and allows artists to file a lawsuit in state court against those who artificially reproduce their voice, image, or likeness without their consent. Cozen O’Connor Public Strategies worked with the Recording Academy to lobby for this bill. The measure, as amended, cleared both chambers unanimously.

AI-generated pornography ban

Championed by Illinois Attorney General Kwame Raoul, HB 4623 amends the Illinois school code to include sexually explicit digital depictions of students under the definition of cyberbullying. The bill updates multiple statutes designed to eliminate AI-generated child pornography and prohibit the transfer of non-consensual AI-generated sexual images.

The bill expands on previous work done by state and federal law enforcement to crack down and update sex offender laws in congruence with AI-technology evolution.

Education

Department of Early Childhood

SB 1 creates the Department of Early Childhood, reallocating the responsibility of managing early childhood programs from the Illinois State Board of Education, the Department of Children and Family Services, and the Department of Human Services. The transition will begin in July with the department becoming fully operational in 2026.

Chicago School Board electoral map

Following up on a 2021 law that established the Chicago elected school board, the General Assembly passed and the governor signed SB 15 in March. The bill establishes elections for half the board, which is set for November 2024. The other 10 board seats and president will be appointed by Chicago Mayor Brandon Johnson. Chicago residents will vote for the entire board, which comprises of 20 districts, in 2026.

Chicago Public Schools moratorium

After a last minute request from Chicago Mayor Brandon Johnson, Senate President Don Harmon decided not to pursue HB 303, a bill that would extend a moratorium on public school closings in Chicago.

In a letter sent to Harmon last week, Johnson wrote that the legislation “seeks to solve problems that do not exist,” and promised that selective enrollment schools are not being targeted. “The District will not close selective enrollment schools nor will the District make disproportionate budget cuts to selective enrollment schools,” Johnson said. “The District will maintain admissions standards at selective enrollment schools. Any narrative to the contrary is patently false.”

Ultimately, Harmon decided to accept Mayor Johnson’s promise not to shut down any schools or deplete funding for selective enrollment schools. “The mayor has always been emphatically clear with me that he does not intend to close schools, he does not intend to under-resource schools, he does not intend to undermine the selective enrollment schools,” said Harmon. “I think his commitment to me is even more clear and more binding than the bill would have been.”

Sports

Chicago Bears and White Sox

Despite efforts by the Chicago Bears and White Sox to receive public funding for their proposed new stadiums in Museum Campus and South Loop, respectively, the state legislature did not address the issue in the spring session. Pritzker has previously called the $4.7 billion proposal a “non-starter,” while legislators decided they needed more time to go through the proposal. If addressed in the fall veto session, the funding package would require a three-fifths majority to pass.

Miscellaneous

Three key measures did not make it through the House after Senate passage, killing them for the spring session: a measure opposed by Pritzker’s office that would have made key reforms to the Illinois Prisoner Review Board; an omnibus cannabis measure; and another that would have banned unregulated hemp products like delta-8.

Mobile Driver’s License

HB 4592 passed both chambers of the Illinois legislature, which allows the Illinois Secretary of State to issue a mobile driver’s license for a slight additional fee to anyone with a physical license. The license will be accessible through the individual’s mobile phone and will comply with the American Association of Motor Vehicle Administration standards. The measure has an effective date of Jan. 1, 2025.

SAFE CCS Act

The Illinois Legislature passed the SAFE CCS Act (SB 1289), which establishes state-level regulations on carbon capture and sequestration projects. The bill places up to a two-year moratorium on carbon pipeline construction while implementing new regulations on permitting and land use.

Veto session

The Illinois General Assembly has not yet posted its schedule for the fall veto session.

If you have any questions regarding this update or if you’re interested in ways to engage on these issues, please contact one of our team members here

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