Illinois Governor to Present 8th Budget Amid Federal Funding Uncertainty

Democrats seek new taxes while Republicans call for limiting spending as state faces budget challenges

Published on Feb. 17, 2026

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Illinois Governor JB Pritzker will present his 8th budget proposal on Wednesday as the state faces significant uncertainty over federal funding. The Trump administration has targeted Illinois for massive cuts to federal funding, while a new federal policy bill will also impact the state's finances. At the same time, the state's economy is facing headwinds, with concerns over a potential recession and the impact of tariffs. Lawmakers will have to balance the desire to fund programs with flattening revenues from both federal and state sources.

Why it matters

The budget proposal comes as Illinois faces a projected $2.2 billion deficit for the upcoming fiscal year, driven largely by changes at the federal level that are reducing funding and increasing administrative costs for the state. This presents a significant challenge for lawmakers who are required to pass a balanced budget, as they must find ways to maintain funding for critical programs while dealing with the volatility of federal policy under the Trump administration.

The details

Governor Pritzker's budget office has already signaled a conservative approach, asking agencies to reserve nearly $500 million in spending due to the uncertainty over federal funding. Democrats are seeking new tax revenue, including proposals to tax billionaires' asset appreciation and digital advertising, while Republicans are calling for limiting spending. The impending changes to Medicaid provider taxes could also create a $1.7 billion annual shortfall by 2031, further complicating the budget process.

  • Governor Pritzker will present his 8th budget proposal on Wednesday, February 16, 2026.
  • Changes from the federal policy bill known as the 'One Big Beautiful Bill Act' will not be fully felt until fiscal year 2028, but will factor into this year's budget process.
  • The state is currently on track to run a $587 million deficit in the current fiscal year ending June 30, 2026, largely due to federal tax code changes.

The players

JB Pritzker

The Democratic Governor of Illinois who is seeking reelection to a rare third term and is emerging as a national figure as a potential 2028 presidential candidate and critic of President Trump.

Kam Buckner

A top Democratic budget negotiator in the Illinois House of Representatives who says the state must focus on building 'certainty in this chaos' amid the federal funding uncertainty.

John Curran

The Republican Senate Leader in Illinois who expects limited spending to continue in this year's budget proposal, citing the governor's past admission of mistakes in expanding health coverage for undocumented immigrants.

Amy Elik

The Republican who leads budgeting for the Illinois House GOP and is concerned Democrats will seek to raise taxes to fill budget gaps rather than control spending.

Karina Villa

A Democratic state senator who says new tax revenue from the wealthy is necessary 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 Democratic Budget Negotiator (Capitol News Illinois)

“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 Democratic Budget Negotiator (Capitol News Illinois)

“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 (Capitol News Illinois)

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This budget process highlights the growing challenges Illinois faces in maintaining critical services and programs amid the volatility of federal funding and policy changes under the Trump administration. Lawmakers will need to find a careful balance between new revenue sources and spending restraint to address the state's looming budget deficit.