Illinois General Assembly Approves $55.9 Billion Budget for FY 2027
The spending plan is approximately flat compared to projected spending in the current fiscal year, including over $800 million in new tax revenue and $185 million in fund sweeps.
The Illinois General Assembly approved a $55.9 billion budget for Fiscal Year 2027 on June 1, 2026. The plan, filed as an amendment to House Bill 111, was passed by midnight to avoid needing a three-fifths majority for it to take effect by July 1.
Revenue and Tax Measures
The budget introduces several new revenue sources:
- $300 million – Extension of the cap on net-operating-loss deductions for corporations
- $200 million – New fee on social media companies with large user bases
- $60 million – A 0.2% tax on digital asset transactions, effective January 1, 2027
- $5 million – A 15% tax on fantasy contest operators' adjusted gross receipts
- $200 million to $800 million – A 10% tax on gross receipts from targeted advertising services (though budget documents state the state does not rely on this revenue due to expected legal challenges)
Other tax measures include:
- Decoupling from the federal Qualified Small Business Stock (QSBS) exclusion, expected to cost taxpayers $50-60 million
- A sales tax holiday on school supplies (duration unspecified)
- A freeze on the scheduled 1.3-cent increase to the state motor fuels tax, saving taxpayers $37.5 million (duration unspecified)
Spending and Fund Transfers
Pension funding: The budget fully funds pensions, with total appropriations to state pension systems reaching nearly $12 billion. Actuaries estimate at least $17 billion is needed to fully fund the systems and address the $143.5 billion pension debt.
Education: The K-12 Evidence-Based Funding model is fully funded.
Property taxes: A new Property Tax Pool Relief grant program requires school districts to forgo property tax increases for three years to receive grants.
Local government: Funding remains unchanged as a percentage of state income tax revenue, resulting in increased funding due to higher overall revenue.
Key fund transfers:
- $150 million – Sales tax revenue from motor fuel transferred to the General Revenue Fund once public transportation is fully funded
- $143 million – Healthcare program for undocumented immigrant seniors
- $4 million – Welcoming centers for immigrants
- $185 million in fund sweeps, including $150 million from the Road Fund and $35 million from the State Coronavirus Urgent Remediation Emergency Fund
- $70 million – Transfer from the BRIDGE program to the Fund for Illinois’ Future for infrastructure projects and grants
SNAP Replacement Program
A separate Budget Implementation Bill creates the Families Receiving Emergency Support for Hunger (FRESH) Program, providing one-time $400 payments to individuals who have lost or seen reductions in SNAP benefits. The program is estimated to cost between $60 million and $70 million and is scheduled for one year.
Lawmaker Compensation
Lawmakers will receive a pay increase of approximately 3.2%, raising base salaries from $98,304 to $101,450, indexed to inflation.
Statements from Lawmakers
Senate Democratic budget leader Elgie Sims stated in an appropriations committee that the budget includes "no tax increases on working families" and aims to "make their lives easier."
Sen. Chapin Rose (R-Mahomet) criticized the gas tax sales tax diversion and questioned funding for undocumented immigrant programs.
Sen. Don DeWitte (R-St. Charles) questioned the SNAP replacement program, suggesting that "eligibility reasons should be examined before issuing payments."
Background
Negotiations on the tax plan were ongoing as of May 31. The budget was approved by the General Assembly on June 1.