Gov. JB Pritzker (D-IL) signed Illinois’s $55 billion fiscal 2026 budget into law on Monday, the largest budget in the state’s history. 

The General Assembly’s 3,000-page budget avoided sweeping tax increases on income and sales, instead relying on over $1 billion in quieter revenue changes. These include $482 million in tax hikes, $100 million in fund sweeps, and $444 million in one-time measures. Republicans argue these tactics reflect a tendency by the governor to prioritize optics over sustainable fiscal solutions.

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“Governor Pritzker signed a so-called ‘balanced’ budget that relies on one-time revenue sweeps and nearly $1 billion in tax hikes,” Republican state Rep. Tony McCombie said in a statement to the Washington Examiner. “This approach sets Illinois up for failure by FY27 and continues a pattern of short-term thinking.”

The budget was hastily passed in the last two days of the legislative session to meet a June 1 deadline. If lawmakers hadn’t passed it by that deadline, the Illinois Constitution would have required a three-fifths majority to approve the budget instead of a simple majority.

While the budget increases spending by nearly 4%, it falls short on pension obligations by $5.1 billion and allocates just $110 million to the rainy-day fund, far below recommended levels. Illinois’s pension systems remain among the worst-funded in the country, with $240 billion in liabilities and a low funded ratio of 52%.

The state is reviving a tax amnesty program and diverting $137 million from the road fund to cover state employee health benefits, a move analysts warn could weaken long-term infrastructure funding. Another $100 million will be swept from dedicated funds into general revenue, a tactic long criticized for undermining fiscal transparency.

Lawmakers also punted on resolving the $770 million fiscal crisis facing Chicago-area transit, pushing possible service cuts, layoffs, or future tax hikes into the fall veto session. 

In education, the budget maintains K-12 funding but eliminates a $43 million property tax relief provision, possibly increasing homeowners’ tax burdens.

ILLINOIS’S $55 BILLION BUDGET APPROVED WITH LESS THAN 48 HOURS FOR PUBLIC REVIEW

Notably, the budget implements a new tax on online sports betting wagers, raises tobacco and vape taxes, and imposes a surcharge on phone lines to support mental health services. Controversial business tax changes include a “throwback rule,” which allows Illinois to tax corporate income from out-of-state sales when those sales aren’t subject to taxation in any other state, and adjustments to the taxation of foreign income, expected to generate millions but likely to draw legal and business backlash.

“House Republicans represent all 102 counties, and we know families want relief, not more taxes and unchecked spending,” McCombie stated. “This budget grows government, not opportunity, and invests in priorities many Illinoisans simply don’t support.”