Illinois Governor PANICS As $56B Budget Is Slowly Making Illinois Impossible To Live In

[00:00:00]Pritzker delivered his annual budget address this afternoon in Springfield while delivering a series of legislative proposals. Pritzker also focused on actions by the Trump administration, economic hardship facing Illinoisans, and his vision for the future.

[00:00:14]>> comes in at about $56 billion and now goes to Governor Pritzker who says he plans to sign it. So, Illinois lawmakers just passed the largest budget in the history of the state, $55.9 billion, the largest single number Illinois has ever spent in a single year. And the governor stood at the press conference after the vote and said this budget builds on 7 years of fiscal discipline.

[00:00:38]The Illinois Policy Institute counted up the math from the same 7 years and found something different. Since this governor took office in 2019, Illinois has grown its budget by $16 billion and enacted over 50 separate tax hikes. 7 years, $16 billion in new spending, over 50 new taxes. Today, I want to walk through exactly what is inside the largest budget in Illinois history and what it has actually cost the people who live here. Before we get into this, subscribe and turn on notifications. We are a small channel pushing toward 5,000 subscribers this month and everyone matters. Now, here is what you need to know. The vote happened at 4:13 in the morning on June 1st, 2026.

[00:01:23]The House approved the budget 76 to 39.

[00:01:26]The Senate had already cleared it 37 to 21. A 3,700 page spending plan was passed by lawmakers who had hours to read it before the vote. The total spending figure is $55.9 billion. It is the largest budget any Illinois General Assembly has ever approved. It will be approximately $700 million higher than the year that came before it. Republican State Senator Don DeWitt stood on the Senate floor and said the new taxes targeting businesses would not stay with businesses. He said companies pass those costs along through their fees, their advertising charges, >> [music] >> their transaction prices. He said the taxpayer is the person who ultimately absorbs the increases regardless of who the tax is officially levied against.

[00:02:13]That is a verified statement from a sitting state senator made on the record. House Majority Leader Robin Gable framed it differently. She said the budget was a vote for the people of the state that life should not feel so hard and that lawmakers had been empowered to make it easier. Both statements were made in the same chamber about the same document [music] on the same morning. The budget contains more than $800 million in new tax increases plus $185 million in what budget analysts call fund sweeps, money moved from designated accounts into the general revenue fund to cover spending the state could not otherwise afford. The largest of the new taxes hits Illinois corporations. It is a $269 million increase generated by capping net operating losses, a provision that restricts how much of a company's prior year losses it can apply against its current year tax bill.

[00:03:07]>> [music] >> Companies that lost money in 2024 no longer get the full deduction against profits in 2026.

[00:03:16]The budget also creates new taxes on social media platforms, on cryptocurrency transactions, and on fantasy sports, three industries that did not exist in their current form when the previous tax code was written. Each of those new taxes has its own collection mechanism and its own projected revenue. A separate provision keeps the share of state income tax revenue distributed to local governments at 6.47% instead of trimming it down to 6.23% [music] as some lawmakers had proposed. That sounds like a small technical change.

[00:03:50]Its practical effect is to reduce the upward pressure on local property taxes, which the Illinois Policy Institute estimated would have produced a $43 million effective property tax hike across the state. But, the same budget cut the property tax relief grant, state [music] funds that local school districts had been receiving specifically to offset property tax increases on homeowners. Removing that grant produces approximately the same effect as a property tax increase for the homeowners in those school [music] districts, even though no one in Springfield voted to raise property taxes directly. That is the design pattern of much of this budget. Direct tax increases are limited. The collection happens through mechanisms that homeowners and small business owners feel through their bills, rather than through a clear new line item on their tax return. Inside the same document that contains $800 million in new taxes, Illinois state lawmakers gave themselves a pay raise. Base salaries went from $98,304 to $101,450.

[00:04:57]That is a $3,146 increase per legislator, a 3.2% raise, for what state law officially classifies as a part-time job. That base salary is before per diem pay for days when lawmakers are required to be in Springfield, before mileage reimbursement for travel between their home districts and the capital, before the additional payments that committee chairs and leadership positions receive on top of the base.

[00:05:24]Illinois law sets legislative pay to increase annually with inflation unless lawmakers actively vote to block the raise. The default is that lawmakers get more money every year. Stopping the raise requires affirmative legislative action. That action was not taken. The raise happened in the same fiscal year that the budget cut health coverage for 32,000 Illinois immigrants through the elimination of the health benefits for immigrant adults program.

[00:05:52]The same fiscal year that the Regional Transportation Authority [music] warned riders could face a 40% reduction in service if the transit funding gap was not addressed.

[00:06:03]Both of those program failures happened in the same document that gave the people who wrote it a 3% salary increase. There is a number in this budget that almost nobody is talking about. And it is the most fiscally significant number in the entire document. Public pensioners in Illinois will receive a benefit spike valued at more than 13 billion dollars under provisions included in the new budget.

[00:06:27]The official explanation is that this represents required adjustments under existing pension formulas. The independent fiscal analysis tells a different story. According to the pension systems' own actuaries, the specialists whose job is to calculate what the system needs to remain solvent for current and future retirees, the budget contributes 5 billion dollars less than what is required to keep the system funded. 5 billion dollars short in 1 year.

[00:06:57]That 5 billion dollar gap does not disappear when the fiscal year ends. It accumulates. [music] It compounds. It joins the already enormous unfunded pension liability that Illinois has been building up for decades. Illinois currently carries one of the highest unfunded pension obligations of any state in the country.

[00:07:16]A number that runs into the hundreds of billions when all five state pension systems are combined. The pension systems were not in this position because of one bad budget.

[00:07:26]>> [music] >> They got here because state lawmakers spent decades approving benefit increases for public workers without setting aside the money required to pay for those benefits later.

[00:07:36]The promises were made. The payments were deferred. The bill is now arriving every year, and the state's budget keeps choosing to underpay it. The Illinois Policy Institute's analysis put it directly. The budget patches its problems using short-sighted fixes with long-term consequences. The pension system that needs more money this year is getting less. The benefit obligations that need to be reduced through structural reform are being increased, and the unfunded liability that will eventually come due is being passed forward to taxpayers who have not yet been told what it will cost them.

[00:08:10]Constitutional pension reform, the kind of structural change that would actually address the imbalance between what Illinois pension funds promise and what they can pay, has not been seriously attempted in this budget cycle or the previous one, or the one before that.

[00:08:25]The Illinois Constitution specifically protects pension benefits from being reduced once granted, meaning any meaningful reform would require a constitutional amendment that has not been proposed by either party in years.

[00:08:38]What gets proposed instead is what this budget contains. More spending, slightly less than what the actuaries say is needed. [music] Promises that the next budget will do better, and the can being kicked one more fiscal year down the road toward whoever has to actually pay it. I want to give the governor's defense its full hearing because it is more specific than just calling the budget disciplined.

[00:09:01]Pritzker said publicly, "Our budget has increased at less than the rest of inflation since I took office." That is his defense. He is arguing that adjusted for inflation state spending has actually grown more slowly than the underlying cost of providing the services Illinois delivers. [music] He also said the federal government is cutting Illinois by over $8 billion.

[00:09:24]He cited the one big beautiful bill act and broader federal program reductions as evidence that the state needs to maintain spending to protect Illinois residents from federal cuts the state did not choose. Both of those points are partially supported. Inflation-adjusted [music] state budgets do grow more slowly in real terms than nominal numbers suggest, and federal funding reductions to Illinois have been documented and are projected to intensify.

[00:09:51]>> [music] >> The counterargument the Illinois Policy Institute makes is that even adjusted for inflation, Illinois spending has outpaced economic growth. From fiscal year 2019 to 2026, Illinois net operating costs increased by over 46% while Illinois nominal GDP grew only 33%.

[00:10:13]>> [music] >> That gap between what the state spends and what its economy produces is what makes Illinois budgets perpetually dependent on new taxes, regardless of how the governor frames the spending.

[00:10:26]Both positions are documented. Both are held by serious people. And the question they describe is not whether Illinois needs to invest in its residents, but how the state can afford what it has already committed to spend when its economy is not growing fast enough to fund it. The governor called it fiscal discipline. The independent analysts called it the largest budget in Illinois history with over $800 million in new taxes attached to it. Both statements are documented and verified. The only question left is which one of those two statements