Illinois faces a $3 billion shortfall in 2026, a new report shows
The relative financial calm that has marked Illinois Gov. JB Pritzker’s six years in office may soon be coming to a close as his administration Friday forecast a more than $3 billion budget shortfall for the next fiscal year.
That marks a major departure from years when the state would post budget surpluses on his watch and presents the governor with a painful set of potential solutions at the same time he contemplates whether to seek a third term in 2026.
Without new revenue or spending cuts, Pritzker’s budget office estimates a $3.17 billion budget shortfall at the end of Fiscal Year 2026, which would be mid-2026 as the gubernatorial election is in full swing.
To confront the problem, it’s not clear whether the governor and Democratic supermajorities in the House and Senate would favor tax or fee increases; spending cuts; delays in paying state bills; use of the state’s $2.2 billion rainy day fund; or a combination of those choices.
“While a daunting challenge to balance spending pressures in the face of a flat revenue outlook, the governor remains committed to taking steps to further improve Illinois’ fiscal position and address any potential budgetary shortfalls that may arise — as has been done every year since he took office in 2019,” the governor’s budget office said in a statement attached to the forecasts. “The ability to fund new programs will be severely limited.”
Republicans pounced on the new set of budget numbers.
“This guy’s spending like a drunk sailor for the first six years of his governorship. Here we are,” said state Sen. Chapin Rose, R-Mahomet, ranking Republican on the Senate Appropriations Committee.
Rose said the appetite of Illinois taxpayers to shoulder tax or fee increases is “about zero.”
“But that doesn’t mean that the supermajority, progressive, left Democrats won’t do that anyway,” Rose said. “I mean, have you talked to anybody going to the grocery store recently?”
The Governor’s Office of Management and Budget estimates that year-over-year sales tax revenues — one of the main revenue drivers of the state budget — will decline slightly in Fiscal Year 2026.
And on the spending side of the ledger, Pritzker’s budget forecasters see sizable increases for education, human services and health insurance for state workers, legislators, judges and their dependents.
Pritzker’s office did not have an immediate response to a WBEZ inquiry about the new budget forecast late Friday.
Dave McKinney covers Illinois government and politics and was the longtime Springfield bureau chief for the Chicago Sun-Times.