SPRINGFIELD, Ill. — In a late-night vote on May 31, Illinois lawmakers passed a $55.2 billion budget for the upcoming fiscal year, introducing a suite of new taxes and revenue changes aimed at closing fiscal gaps without altering state income or sales tax rates.
Key Revenue Measures in the New Budget
Democrats backed the spending plan, citing the need for stability amid federal uncertainty and shrinking revenues, while Republicans denounced the process for lacking transparency.
The budget includes over $1 billion in new taxes and adjustments, including:
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A 25-cent tax per wager on the first 20 million sports bets placed, rising to 50 cents per wager thereafter.
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An increase in the tax on tobacco products from 36% to 45% and new taxes on vaping products and nicotine pouches.
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Expansion of corporate income tax to cover income shifted out of state or internationally.
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New rules requiring out-of-state businesses, like Amazon, to collect Illinois sales taxes if they generate more than $100,000 in sales to Illinoisans, even if they don’t operate physically in the state.
These changes are expected to raise significant revenue, including $228 million from a new tax amnesty program and $171 million from pausing the final transfer of motor fuel tax revenue.
Impact on Immigrant Healthcare and Social Spending
The plan also includes $330 million in cuts to a health care program for noncitizens aged 42–64, while preserving a smaller $110 million program for immigrant seniors. Despite these cuts, $40 million was added for Federally Qualified Health Centers to aid uninsured populations.
According to Democrats, the cuts were necessary due to budget overruns. The program had exceeded $1.6 billion in total costs, far surpassing projections.
Education and Pension Funding Updates
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K–12 education funding will rise by $307 million, short of the $350 million benchmark in the state’s evidence-based model.
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Community colleges will see a $24 million reduction, largely due to underused workforce grants.
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The new budget sets aside $75 million for a Tier 2 pension reserve fund, anticipating possible noncompliance with Social Security’s “safe harbor” requirements.
No Bears Stadium Funding, But NASCAR and PGA Get Boost
Notably, the budget did not include funding for the Chicago Bears’ proposed stadium. However, it did allocate:
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$5 million to NASCAR for its July street race in downtown Chicago.
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$1 million to the PGA Tour for the upcoming 2026 Presidents Cup in DuPage County.
In addition, $300 million was approved to repurpose unused state properties for development projects.
New Emergency Fund and Lawmaker Raises
To prepare for further uncertainty from Washington, the budget includes:
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A $100 million “emergency” fund controlled by the governor.
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Suspension of $45 million in “rainy day” fund transfers for FY26.
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An increase in base salaries for lawmakers to $98,304, drawing criticism from Republican legislators.
Do you think Illinois’ new tax strategies are a smart way to balance the budget, or are they pushing too much onto consumers and businesses? Share your thoughts in the comments at ChicagoSuburbanFamily.com.
