* 2/18/26 - Crains - Facing headwinds, Pritzker pitches slight increase in spending + links to related documents.......
Buzz Sawyer
Pritzker fact sheet: Social media
* Pritzker fact sheet: Housing Affordability
* Pritzker fact sheet: College Affordability
* Pritzker fact sheet: Junk Fees
* Pritzker fact sheet: CCBA
* Pritzker fact sheet: Children's Social Media Safety
* Pritzker fact sheet: Cell Phones in Schools Ban
* Pritzker fact sheet: Nuclear Energy
Facing headwinds, Pritzker pitches
slight increase in spending
Gov. JB Pritzker is proposing one of the smallest spending increases of his tenure, unveiling a $56 billion budget that would grow just 1.6% next year after years of rapid expansion — and amid growing uncertainty over federal funding and tax policy.
Pritzker is pitching a budget aimed at preserving fiscal stability without broad-based tax hikes. To make ends meet, Pritzker is proposing a tax on large social-media platforms and an increase in gaming taxes to equalize the rate between electronic and table gaming. The social-media tax would produce $200 million, which would be designated for education. (Read the full budget address below).
“The governor believes strongly it’s time for these companies to live up to their responsibility of funding public education in the state,” a senior budget official told reporters.
A similar measure was proposed late in last year’s legislative session but was scuttled.
Holding the line
Pritzker has been signaling for months that he planned to hold the line on spending, telling state agency leaders to come up with ways to trim spending 4% to create a $500 million reserve for potential shortfalls.
"Prudence demanded that this year’s budget proposal seeks a discretionary spending increase that is less than one-half of one percent," Pritzker said during his State of the State address. "It levels off and in some cases reduces programs that are important to me — some of which were proposals of my own. But I believe that the imperative of responsible governance and overcoming the fiscal irresponsibility of past decades must come ahead of the interests of any one politician, program, or party."
But Pritzker pledged to find ways to make life more affordable for Illinois residents, and he challenged businesses to help.
"That doesn’t mean we can’t make transformative progress. We won’t let headwinds from Washington stop us from addressing the fact that Illinoisans, like Americans everywhere, are still paying too much for groceries, too much for housing, too much for electricity, too much to live. Everything is just too damned expensive," he said.
The state’s finances have been a priority for Pritzker, who is running for a third term as governor. He frequently points to 10 credit upgrades Illinois has received since he took office in 2019, facing a backlog of $8 billion in unpaid bills.
His critics, however, note that annual spending has increased roughly 40% since then.
“If he is serious about protecting Illinois’ fiscal solvency, he’ll start by making the difficult and sometimes unpopular decisions to constrain state spending, reduce taxes and improve economic opportunity for all illinoisans by inviting capital investment in Illinois,” Sen. John Curran, R-Downers Grove, the Senate Republican leader, said before the budget was unveiled.
Business groups praised Pritzker's efforts to keep a lid on spending but criticized proposals such as the social-media tax.
D.C.'s cost-cutting
Federal funding remains a question mark. Pritzker’s budget team currently forecasts that federal money that goes into the state’s general fund will be up about 1.4% to about $4.1 billion.
Most of the rise in spending in Pritzker’s proposed budget is for a mandated increase in education funding, as well as increased pension payments and medical expenses. Absent those costs, spending would increase less than 0.5%, budget officials say.
The budget office recently warned that revenue will be $250 million lower in the year ahead, largely because of federal tax breaks passed last year. Illinois, like many states, uses federal tax returns as a starting point for collecting revenue.
However, the financial picture is less dire than feared just six months ago. The state now expects about $1 billion more in revenue than previously forecast, largely because of an unexpected 3% rise in individual income taxes, reflecting gains in the stock market. Sales taxes also look to be stronger than previously expected.
The bigger concern is what lies ahead. The Trump administration has announced plans to cut about $1 billion in spending on various grant programs. The cuts are being challenged in court.
The Governor’s Office of Management and Budget estimates that the state could receive $6.6 billion less in federal support for Medicaid between 2027 and 2032, as well as reductions for other programs. Together, the cuts create financial headwinds for Pritzker and legislators.
The governor also is battling with fixed costs related to the state's underfunded pension systems. The tab for the coming year is $10.7 billion.
Social media tax, insurance reforms
The governor's proposed tax on social-media platforms would be levied based on the number of users in the state, starting at 10 cents per month for companies with 100,000 to 500,000 users. The largest platforms would pay $165,000 per month, plus 50 cents for each user over 1 million.
Chicago’s 2026 budget authorized a new social-media tax that would levy a charge of 50 cents per monthly user, exempting the first 100,000 users, on the companies. But, fearing a court challenge, the city did not count the projected $31 million tax haul as revenue for 2026.
Pritzker's proposal is similar to a policy in Maryland, which was the first state to tax digital ads, passing a law in 2021. The tax survived several legal challenges and produces about $90 million, or less than half of what legislators anticipated, according to the National Taxpayers Union Foundation. Austria and Hungary tax digital advertising, according to the Brookings Institution.
The governor also renewed his call to give the Illinois Department of Insurance authority to regulate the rates companies such as Allstate and State Farm charge for homeowners insurance. A bill passed the Senate but did not make it to Pritzker's desk.
"Forty-nine other states have this reporting requirement. Illinoisans deserve nothing less," Pritzker said. "1.5 million Illinois households could see their insurance bills go up by an average of $750 this year. For most homeowners, this is nothing short of a crisis.
"And no one should claim that pursuing standard homeowner protections is an attack on business. This is about fairness and corporate responsibility to consumers."
The Illinois Insurance Association, American Property Casualty Insurance Association and National Association of Mutual Insurance Companies said the proposal would result in higher premiums for Illinois customers, drawing a parallel to the California market. They claim that regulation would cause some insurers to pull out, which increase rates by reducing competition.
“Illinois families are facing financial pressure from rising costs across the board, and insurance is just one piece of that puzzle," the groups said in a statement. "However, Illinois House Bill 3799 could make a difficult situation much worse by raising costs for consumers and threatening the stability of the state’s insurance market. The bill is likely to cause insurance premiums to increase by 20%, costing the average household in Illinois $230 more per year."
'Junk fees'
Pritzker also issued a broader call to business leaders as he promised to take aim at so-called junk fees.
"I’m committed to doing everything government can to rein in the worst of the price-gouging and profiteering we are seeing. But I implore the titans of industry who regularly ask government to make their lives easier — what are you doing to make your employers’ and your customers’ lives easier? It’s a question I am committed to asking every CEO who shows up in Springfield looking for help," he said."
"Before I became governor I had a long career in business and employed thousands of people. The vast majority of business owners are good people who want to do right by their employees, their communities and their customers. Right now, everyday people are having trouble making ends meet, and we are all looking for ways to alleviate their burden. So it’s time for every business to get in the game, step up to the plate, raise wages and help lower the cost of living for Illinois families."
The Illinois Chamber of Commerce said the proposals such as the junk-fee ban and social-media taxes "send the wrong message to Illinois employers and the workers and communities they support."
The Illinois Retail Merchants Association also took aim at the social-media tax.
“We have serious concerns with proposals to impose a tax on digital advertising when retailers are already facing rising operating costs and intense competition," CEO Rob Karr said. "Retailers, especially small businesses, rely on affordable digital tools to reach new consumers and grow, and this proposal risks undermining local businesses and the communities they serve.”