Illinois Faces Uncertain Budget Future as Federal Funding Dwindles

Governor Pritzker to unveil new state budget amid revenue growth challenges and doubts about federal funding.

Published on Feb. 17, 2026

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Governor JB Pritzker will present his eighth budget on Wednesday, outlining a plan to deal with limited revenue growth and significant uncertainty over the future of federal funding for the state. Several policies from the federal government have raised costs for Illinois or diminished the amount of money the state will receive, causing forecasters to project growing deficits in the coming years.

Why it matters

The ever-changing federal funding landscape presents lawmakers and Pritzker with a murky picture of the state's financial future, which can change rapidly based on actions taken by the federal government. This uncertainty makes it difficult for Illinois to plan and budget effectively, as the state constitution requires a balanced budget.

The details

Pritzker and his team have already started setting expectations for a conservative budget, telling agency leaders that it will be difficult for the state to fulfill funding requests this year. The Governor's Office of Management and Budget estimated in October that lawmakers will have to close a $2.2 billion deficit for fiscal year 2027, driven by the state's own spending exceeding projected revenue and changes at the federal level. Federal funding to Illinois has declined for three consecutive months, and the overall health of the economy also presents a challenge, with a recent forecast predicting Illinois' economy will struggle under the weight of tariffs and cuts to social services.

  • Pritzker will present his eighth budget on Wednesday, February 16, 2026.
  • The state's fiscal year 2027 begins on July 1, 2026.

The players

JB Pritzker

The governor of Illinois, who will present his eighth budget on Wednesday.

Kam Buckner

A top House Democrat budget negotiator from Chicago, who said one of the goals of this year's budget will be to play 'defense' against the uncertainty of federal funding.

John Curran

The Senate Republican Leader from Downers Grove, who expects limited spending to continue in this year's budget proposal.

Amy Elik

The Republican representative from Godfrey who leads budgeting for House Republicans, and who is concerned that Democrats will seek to raise taxes to fill budget gaps.

Karina Villa

A Democratic state senator from West Chicago, who said new revenue must come from taxing the ultra-wealthy because businesses and wealthy Americans have benefited from tax policies in Washington.

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What they’re saying

“It's hard when the biggest variable in the budget is not something that you can control. And with this president, the volatility isn't a possibility; it's a given.”

— Kam Buckner, Top House Democrat budget negotiator (evanstonnow.com)

“You can't ignore what is coming down the road, and so we should expect and work towards a proactive plan for next year's gap starting now, not after May, because the gap is being driven by forces that won't wait for the spring.”

— Kam Buckner, Top House Democrat budget negotiator (evanstonnow.com)

“If we don't fight back with taxing the ultra-wealthy, we're going to continue to chop services in order to balance budgets.”

— Karina Villa, Democratic state senator (evanstonnow.com)

What’s next

Pritzker will present his budget proposal to the Illinois General Assembly on Wednesday, February 16, 2026. Lawmakers will then negotiate the budget over the coming months, with a final budget expected to be passed before the start of the new fiscal year on July 1, 2026.

The takeaway

Illinois faces significant uncertainty in its budget planning due to the unpredictable nature of federal funding and policy changes under the current presidential administration. This will require state lawmakers to take a cautious and defensive approach in crafting the upcoming budget, potentially relying on revenue increases or spending cuts to maintain a balanced budget.