Lawmakers return to Illinois capitol as projected budget deficit looms

Illinois lawmakers returned to Springfield Tuesday for the first time since May following news earlier this month that they're facing a projected $3.2 billion budget deficit for the fiscal year that begins July 1.

The news didn't surprise Republicans, who condemned "drunken spending" policies, but the Senate's top Democratic budget leader defended the state's spending priorities and cautioned next year's budget is still more than six months away from passage.

"This was not unexpected and certainly there's a long time between now and the end of the fiscal year and we'll be prepared," Sen. Elgie Sims, D-Chicago, said.

The Governor's Office of Management and Budget released a report on Nov. 1 projecting the state will face a $3.2 billion deficit for fiscal year 2026, which begins July 1. The annual report from the governor's budget office typically sets a benchmark for state lawmakers as they begin budget talks early in the year.

How this shortfall will be addressed, either through corresponding spending cuts or new revenue increases, will be the focus of lawmakers and Gov. JB Pritzker during the spring session that begins in January.

The General Assembly was scheduled to be in town this week and next for their annual fall veto session, and Senate Republicans held a news conference about the projected deficit a top priority.

Republicans said Democrats should start by cutting out programs for noncitizens and migrants.

"These are tradeoffs. So when Gov. Pritzker supports spending over $1 billion on illegal immigrants, that means that schools aren't being properly funded in Illinois, that means developmentally disabled aren't being properly funded in Illinois," Senate Republicans' budget leader Sen. Chapin Rose, R-Mahomet, told Capitol News Illinois. "That's a choice the Democrats are making."

Preliminary estimates show the state is on pace to spend $568 million this year on a program that provides health care to undocumented immigrants, according to the Illinois Department of Healthcare and Family Services. State lawmakers appropriated $629 million in the spring for the programs, which are currently paused to new enrollment, plus $182 million to pay for services for migrants sent to Illinois from Texas. Rose argued there's not enough transparency about the programs to know the true amount of state spending.

Senate Republican Leader John Curran, R-Downers Grove, also demanded Democrats spend more time negotiating with Republicans on the budget this spring, alleging that Democrats closed out the minority party earlier this year.

Sims noted recent budgets have also significantly increased education funding.

"If they want to classify investments in education and making investments in health care as overspending, I'll let them make that case," Sims said. "We've tried very hard to work with our colleagues on the other side of the aisle and we'll continue to do so."

Pritzker declined to give many details when asked last week how he plans to propose closing the deficit when he presents his budget in February.

"It's kind of a flat projection forecast. It's been wrong every year, I guess you might say, or we've defeated it every year," Pritzker said, adding the budget he will present to lawmakers is going to be balanced.

The Illinois Constitution requires the General Assembly to pass a budget that is balanced on paper, meaning lawmakers won't pass a budget that contains a sizeable deficit according to their calculations.

But Pritzker also received some of his first significant pushback to a budget in May when multiple Democrats in the House and Senate voted against parts of the spending plan.

This year's $53.1 billion budget is currently expected to meet spending and revenue expectations and run a $16 million surplus when accounting for contributions to the state's "rainy day" fund, according to the report. Lawmakers chose to raise about $1 billion of new revenue to support this year's spending, such as by raising taxes on sportsbooks and video gambling and capping a sales tax discount for retailers.

One thing lawmakers can't do is implement across-the-board spending cuts, according to GOMB. The report said about 40% of state spending is required by courts, state law and other obligations. Another 24% is for education and higher education, including the $350 million increase to education funding that is called for as part of the state's evidence-based funding formula for K-12 schools each year.

"We're looking at everything," Sims said. "That's the beauty of the budget process. Each budget has its own identity and this budget's no different."

Sims said there have been no discussions about tax increases to close the revenue gap. Curran said Democrats should pledge not to hike any taxes to balance the budget.

"What we're not interested in is making life worse for working families," Rose said. "The clear message from this election, whether you're in Illinois or Montana, is real people are tapped out. They don't have more money to give."

State lawmakers face a variety of spending pressures this year outside of what is already in the state budget. Chicago officials have asked Springfield to step up funding for Chicago Public Schools, sports teams want money from the state to build new stadiums and the Chicago area's transit agencies are facing a $730 million budget gap next year that many hope the state can help fill.

Sims acknowledged the "infinite needs, but finite resources" of the state budget, but said Democrats will continue to prioritize investments in education, health care and other areas.

If Republicans get a better seat at the table, they would be looking for ways to reduce spending, Curran said.

"We are going to have to constrain spending," Curran said. "We're going to have to go line by line. Everything needs to be on the table for that and that's a process that needs to start early."