By BEN SZALINSKI
& JERRY NOWICKI
Capitol News Illinois
news@capitolnewsillinois.com
SPRINGFIELD – Gov. JB Pritzker said Wednesday he will not sign a budget that includes broad tax hikes to fund new spending as lawmakers are in the final hours of budget negotiations.
“Anything that’s broad-based and would have a negative impact on working families, I would veto a budget like that,” Pritzker told reporters.
Pritzker said he would specifically veto any budget that includes tax increases on individuals, corporations or the sales tax – the three largest sources of revenue in the state budget. Pritzker also ruled out a sales tax on services to provide new funding to the state.
Personal income tax growth in Illinois has remained strong, up 10% through for fiscal year 2025 as compared to the same point in fiscal year 2024, according to the legislature’s Commission on Government Forecasting and Accountability. But sales taxes have been stagnant, and corporate income tax is down 8% for the year.
While Pritzker ruled out “broad-based” tax increases, it’s not clear whether he’d approve more targeted tax increases, particularly those that may not directly be paid by “working families.” The governor pushed about $900 million of targeted tax changes on businesses and sportsbooks to balance the FY25 budget but proposed only a $100 million tax increase on electronic gambling and table games at casinos in his FY26 proposal.
Pritzker told reporters he also hasn’t reviewed any possible revenue sources, including tax increases, to fund a budget gap for Chicago-area public transportation agencies. Pritzker added he also isn’t pushing lawmakers to adopt any specific funding sources for it.
Read more: State budget talks enter final week amid fears of congressional cuts
Illinois lawmakers are in the final days of negotiations over the fiscal year 2026 budget set to take effect on July 1. But growing uncertainty about revenue projections next year has left Democrats in a difficult spot as they seek funding for programs.
Pritzker proposed a $55.2 billion spending plan to state lawmakers in February, but revenue projections for FY26 have decreased to $54.9 billion, giving lawmakers even less room to increase spending without finding more money to pay for it.
Democrats have reviewed lists of possible tax hikes on specific transactions in closed-door meetings over the last week. It was still unclear as of Wednesday afternoon which, if any, tax increases would be included in the final budget proposal.
Democratic leaders have tempered expectations for their members.
“The biggest thing that I’ve said to the caucus pretty consistently since day one is that no one’s going to get everything they want, that we have to have reasonable expectations, that we have to balance the budget,” House Speaker Chris Welch, D-Hillside, told Capitol News Illinois in a recent interview. “We’re going to spend what we bring in, no more.”
Republicans have pledged to oppose a budget that includes any tax increases but aren’t involved in detailed negotiations on the budget.
“The legislature has a great track record of using this time, squandering time for many months, and using the waning hours of the legislative session to enact gigantic changes that have real-world consequences for taxpayers,” Rep. Ryan Spain, R-Peoria, told reporters last week.
Business groups are also concerned about possible tax increases. Sixteen business groups that lobby state lawmakers signed a letter to senators on Tuesday asking them to oppose a digital advertising tax.
Such a tax – which hasn’t been officially proposed as legislation – would impose new costs on businesses that advertise on digital platforms, such as social media sites.
“While we understand the need to address the State’s projected budget deficit, taxing digital advertising is a misguided approach that would ultimately harm Illinois’ economy and disproportionately affect small and medium-sized enterprises (SMEs) that rely on cost-effective digital marketing to reach their customers,” the letter said.
The businesses warned that the tax would likely be challenged in court for violating the Commerce Clause of the U.S. Constitution. If a judge granted a preliminary injunction preventing the state from collecting revenue from the tax during a lengthy court battle, the state could be left with a hole in the budget.
“A digital ad tax might sound like it targets ‘big tech,’ but in practice, it’s a regressive cost that squeezes the very businesses Illinois should be empowering. This policy would raise costs, reduce competitiveness, and stifle growth at a time when many businesses are dealing with economic uncertainty,” the letter said.
Pritzker made his remarks at a ceremony dedicating the reading room in the Illinois State Library in honor of former Republican Gov. Jim Edgar, who is battling pancreatic cancer.
Pritzker recounted his first meeting with Edgar after he was elected governor in 2018, just months after the state ended a costly two-year budget impasse between Republican Gov. Bruce Rauner and Democrats in the General Assembly.
“He said one really important thing to me,” Pritzker recalled. “He said: you really only have one critical job as governor of Illinois, and that’s pass a budget.”
Edgar recalled his own budget struggles. He was secretary of state until 1991 when he served as a driving force behind the library building that sits across the street from the Illinois State Capitol. He’d brokered the deal with Republican Gov. Jim Thompson.
But, Edgar said, when his team sat down to review the legislation enacting the public works program that year, funding for the library was initially absent.
Ultimately, their staffers connected, and the funding was included.
“But what I want to remind you – don’t think just because they told you a month ago, they’re going to do it,” Edgar said. “They might forget. So, in the next four days, you better just check on the people who promised you they were going to do these things.”
Capitol News Illinois is 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.
