{"id":20493,"date":"2025-10-13T10:45:17","date_gmt":"2025-10-13T15:45:17","guid":{"rendered":"https:\/\/www.thexradio.com\/news\/?p=20493"},"modified":"2025-10-13T10:47:28","modified_gmt":"2025-10-13T15:47:28","slug":"illinois-budget-on-track-for-deficit","status":"publish","type":"post","link":"https:\/\/www.thexradio.com\/news\/local-news\/20493-illinois-budget-on-track-for-deficit\/","title":{"rendered":"Illinois&#8217; Budget On Track for Deficit"},"content":{"rendered":"<div class=\"pdfprnt-buttons pdfprnt-buttons-post pdfprnt-top-right\"><a href=\"javascript: window.print()\" class=\"pdfprnt-button pdfprnt-button-print\" target=\"_self\" ><img decoding=\"async\" src=\"https:\/\/www.thexradio.com\/news\/wp-content\/plugins\/pdf-print\/images\/print.png\" alt=\"image_print\" title=\"Print Content\" \/><span class=\"pdfprnt-button-title pdfprnt-button-print-title\">Print<\/span><\/a><\/div><p>By Ben Szalinski Capitol News Illinois<\/p>\n<p>SPRINGFIELD \u2014 Illinois is on track to run a more than $200 million deficit just three months into the current fiscal year, according to the Governor\u2019s Office of Management and Budget.<\/p>\n<p>If nothing changes, the deficit is on pace to grow to $2.2 billion when fiscal year 2027 begins next July.<\/p>\n<p>GOMB released its\u00a0<a href=\"https:\/\/budget.illinois.gov\/content\/dam\/soi\/en\/web\/budget\/documents\/economic-and-fiscal-policy-reports\/Economic_and_Fiscal_Policy_Report_FY26_10.9.25.pdf\" target=\"_blank\" rel=\"noopener\">annual report<\/a>\u00a0on Thursday, which includes a five-year projection for state spending and revenue rates. The report provides an annual early look at the direction of state finances, though longer-term windows are notoriously hard to accurately project. In past years, deficits have been considerably lower than the opening-round projections of the annual GOMB report.<\/p>\n<p>This year\u2019s report shows lower-than-expected corporate tax revenue, federal tax law changes and economic volatility are driving a $267 million deficit in the fiscal year 2026 budget.<\/p>\n<p>Overall revenue is projected to decrease $449 million from the amount anticipated last May, to a total of $54.8 billion. Lawmakers originally expected $55.3 billion in revenue while they appropriated $55.1 billion in spending.<\/p>\n<p><strong>Read more:\u00a0<\/strong><a href=\"https:\/\/capitolnewsillinois.com\/news\/pritzker-signs-55-1b-state-budget-reliant-on-700m-of-new-taxes\/\" target=\"_blank\" rel=\"noopener\"><strong>Pritzker signs $55.1B state budget reliant on $700M of new taxes<\/strong><\/a><\/p>\n<p>GOMB noted some revenue sources are on pace to grow this year, but uncertainty over tariffs and dwindling consumer spending is keeping corporate tax returns down. The One Big Beautiful Bill Act \u2014 the domestic policy plan President Donald Trump signed in July \u2014 also included several corporate tax breaks that are set to reduce tax revenue to the state.<\/p>\n<hr \/>\n<p><a href=\"https:\/\/public.flourish.studio\/visualisation\/25577739\/\" target=\"_blank\" rel=\"noopener\"><small>Open interactive chart in new tab<\/small><\/a><\/p>\n<p><iframe class=\"flourish-embed-iframe\" title=\"Interactive or visual content\" src=\"https:\/\/flo.uri.sh\/visualisation\/25577739\/embed\" frameborder=\"0\" scrolling=\"no\" sandbox=\"allow-same-origin allow-forms allow-scripts allow-downloads allow-popups allow-popups-to-escape-sandbox allow-top-navigation-by-user-activation\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<div><a class=\"flourish-credit\" href=\"https:\/\/public.flourish.studio\/visualisation\/25577739\/?utm_source=embed&amp;utm_campaign=visualisation\/25577739\" target=\"_top\"><img decoding=\"async\" src=\"https:\/\/public.flourish.studio\/resources\/made_with_flourish.svg\" alt=\"Made with Flourish\" data-pin-no-hover=\"true\" \/><\/a><\/div>\n<hr \/>\n<p>An Illinois Department of Revenue analysis found the federal tax policy changes could reduce FY26 revenue by $830 million. Many states like Illinois tie portions of their corporate tax collections to the federal tax code to make it easier for the state to administer the tax and easier for businesses to file them.<\/p>\n<p>GOMB is recommending the state decouple from certain parts of the federal tax code. If that happens, the $267 million shortfall should largely be avoided, according to GOMB.<\/p>\n<p>House Speaker Chris Welch, D-Hillside, told Capitol News Illinois lawmakers are already exploring that option for action in the fall veto session.<\/p>\n<p>Gov. JB Pritzker also signed an executive order last month directing certain state agencies to reserve 4% of FY26 general fund appropriations and identify other ways to reduce spending or create efficiencies. The state also has a $100 million fund it can tap into to cover gaps this year.<\/p>\n<p><strong>Read more:\u00a0<\/strong><a href=\"https:\/\/capitolnewsillinois.com\/news\/pritzker-directs-agencies-to-limit-spending\/\" target=\"_blank\" rel=\"noopener\"><strong>Pritzker directs agencies to limit spending in response to Trump\u2019s economic policies<\/strong><\/a><\/p>\n<p>Pritzker\u2019s order triggered some criticism from Republicans, who said they were sounding the alarm on budget pressures even before Trump was elected. Last year\u2019s GOMB report, released before Trump\u2019s election, showed lawmakers faced a $3 billion deficit in FY26 that was eventually closed, including with the help of $700 million in new taxes.<\/p>\n<p>Senate President Don Harmon, D-Oak Park, defended Democrats\u2019 budgeting strategy in an interview with Capitol News Illinois.<\/p>\n<p>\u201cYou can\u2019t predict the unpredictable,\u201d Harmon said. \u201cIf we were sitting around navel gazing trying to figure out what the folks in Washington might do, we still wouldn\u2019t have a budget. We did the best we could with the information we had.\u201d<\/p>\n<h3><strong>Future years become more challenging<\/strong><\/h3>\n<p>Budgeting will become even more challenging for lawmakers in next year\u2019s spring session as the projected deficit climbs to $2.2 billion.<\/p>\n<p>GOMB\u2019s projections are based on current law, meaning they reflect the reality if lawmakers make no spending cuts or raise no new revenue.<\/p>\n<p>Even so, GOMB warns \u201cthe ability to fund new programs will be severely limited,\u201d sending an early message to advocates and lawmakers seeking new or increased state spending that their requests might not be answered.<\/p>\n<p>The report projects FY31 will see a $5.3 billion deficit, in part because of federal policy changes that require states to cover a greater portion of social programs.<\/p>\n<p>Beginning next October, states will have to cover half of administrative costs for the Supplemental Nutrition Assistance Program, rather than 25%, and start covering a portion of benefits in October 2027. States like Illinois with a higher error rate on SNAP payments will have to cover a greater portion of benefits. Illinois\u2019 current error rate would put it on track to pay $705 million for benefits when the new policy takes effect.<\/p>\n<p>Medicaid cuts at the federal level also significantly increase pressure on Illinois\u2019 budget, especially beginning in FY28. GOMB projects health care provider taxes the state uses to support Medicaid will substantially decline between FY28 and FY32. GOMB estimates the state will see federal Medicaid funding decline by $2.8 billion by FY31 unless Congress restores it or the state provides its own funding.<\/p>\n<p>The Medicaid changes will cost the state between $1.7 billion and $4.5 billion in FY31, according to GOMB. The exact total depends on how much the state increases spending to fill gaps Congress left in the program.<\/p>\n<p>The Trump administration is also broadly cutting federal grants for other programs outside the state\u2019s general fund budget, though GOMB did not have an estimate for how much.<\/p>\n<p>\u201cGOMB expects the state to have a very limited ability to replace lost federal funding for these specialized state grants and no funding to replace lost grants made directly to local governments and community organizations,\u201d the report said.<\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/capitolnewsillinois.com\/\"><em>Capitol News Illinois<\/em><\/a><em>\u00a0is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Ben Szalinski Capitol News Illinois SPRINGFIELD \u2014 Illinois is on track to run a more than $200 million deficit just three months into the current fiscal year, according to [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"categories":[19],"tags":[],"class_list":["post-20493","post","type-post","status-publish","format-standard","hentry","category-local-news"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Illinois&#039; Budget On Track for Deficit - Effingham&#039;s News and Sports Leader, 979XFM and KJ Country 102.3<\/title>\n<meta name=\"description\" content=\"Effingham&#039;s News and Sports Leader\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.thexradio.com\/news\/local-news\/20493-illinois-budget-on-track-for-deficit\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Illinois&#039; 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