Governor Pritzker’s State of the State and FY 2027 Budget Proposal Summary
Third Reading Consulting Group
February 18, 2026
On February 18, Illinois Gov. J.B. Pritzker gave his annual State of the State and budget address. He discussed successes under his leadership and provided insight into the state’s priorities for FY 2027, particularly as Illinois braces for federal cuts to the Supplemental Nutrition Assistance Program (SNAP) and Medicaid and expects various threats to cut other funding sources.
Gov. Pritzker revised his FY 2026 revenue forecast to $55.228 billion, an increase of $399 million over the previous October 2025 estimate, due to stronger than expected revenues from personal income tax, sales taxes, excise taxes, investment income, and wagering, among other factors. Even so, the current revenue forecast remains $70 million lower than the original revenue from the time the FY 2026 budget was passed last May in large part due to the impact of federal tax changes from H.R. 1, the One Big Beautiful Bill Act. Illinois decoupled from two of the federal tax changes from H.R. 1, but the estimated revenue loss from the other changes is still $587 million in FY 2026. With estimated FY 2026 expenditures of $53.153 billion, the revised surplus is projected at $75 million.
Gov. Pritzker’s FY 2027 budget proposal estimates $56.055 billion in General Funds revenues and $56.032 billion in General Funds expenditures, a balanced budget with a slight $24 million surplus. FY 2027 revenues are up roughly 1.5% (or $830 million) over current FY 2026 estimates. The budget proposal includes approximately $589 million in new revenue adjustments, including: $200 million from a social media platform fee, dedicated to K-12 education; $269 million increase to corporate income tax collections by adjusting the net operating loss deduction cap sunset to a phased in approach; and $120 million from realigning tax treatment for table and electronic games at casinos. The budget proposal also estimates a 1.4% increase in federal funds deposited to General Funds, bringing the total to $4.071 billion.
FY 2027 expenditures are projected to increase by 1.6% (or $878 million). The proposal provides $10.7 billion to fully fund the state’s certified pension obligation. Over 85% of the spending increases are devoted to fixed costs such as education ($305 million increase), healthcare ($269 million increase), and pensions ($192 million increase). Discretionary spending increases are up less than 0.5% over FY 2026.
Along with his budget proposal, Gov. Pritzker provided an overview of his legislative agenda. In order to address projected housing demand and affordability concerns, Pritzker announced the Building Up Illinois Developments (BUILD) plan to modernize building codes to allow for higher-density housing types, expand transit-oriented development, and streamline housing construction permitting processes to allow for faster and cheaper construction. In conjunction with his address, Gov. Pritzker signed Executive Order 2026-01 immediately instructing state agencies to work together to plan for the development of at least two gigawatts of new nuclear energy, with construction to begin by 2033. On the demand side, Pritzker proposed a two-year pause on the authorization of new data center tax credits. He also announced his support for legislation to ban “junk fees” by requiring full upfront disclosure of all mandatory fees and called on the Illinois House of Representatives to pass HB 3799, which passed the Senate in the fall and would require homeowners insurance companies to justify material premium increases.
Now that Gov. Pritzker introduced his FY 2027 budget proposal, the General Assembly has until May 31 to pass a final budget. Figures and line items in the budget proposal are subject to change in the coming months as the FY 2027 outlook becomes clearer. See the attached for additional details from the State of the State and FY 2027 budget proposal.
GOMB FY 2027 Budget Proposal Documents
Operating Budget Data Files Description (pdf)
Operating Budgeting for Results Detail (xls)
Performance Measures Detail (xls)
FY25 Supplemental Details (xls)