Illinois state lawmakers’ spending plans came in $410 million higher than what Gov. J.B. Pritzker originally proposed. Taxpayers will be forced to pay $1.1 billion more so Illinois can spend record amounts in fiscal year 2025.
By Bryce Hill | Illinois Policy Institute
Members of the Illinois General Assembly managed to take Gov. J.B. Pritzker’s record $52.7 billion budget proposal and boost it into a $53.1 billion spending plan, which also required them to take his $898 million in new taxes and hike them to $1.1 billion.
Those tax hikes were what reportedly delayed lawmakers, who originally anticipated passing the state budget and adjourning their spring session by May 24. Pushback from Democratic members on aspects of the various tax hike proposals delayed adjournment until May 29. An hour of debate at 1 a.m. was followed by a 65-45 (7 abstaining) House vote that sent the 3,300-plus page budget to the governor.
Despite $1.1 billion in tax hikes and record spending, the 2025 budget continues Illinois’ long-standing tradition of failing to make an actuarially sufficient pension payment. Appropriations to the five statewide pension funds will fall $4.5 billion below what the plans’ own actuaries have determined is required to actually begin paying off the state’s pension debt.
Lawmakers ultimately chose not to include Pritzker’s plan to extend Illinois’ pension funding ramp by through 2048 in order to increase the state’s funding target from 90% to 100%. Illinois’ pension systems should be targeting 100% funding to be fully funded. In addition to continuing to target a lower funding ratio, the budget ignores the basic fact Illinois’ pension contributions, while statutorily sufficient, remain insufficient on an actuarial basis – meaning they won’t meet real-world needs.
The state’s funding schedule will not contribute above current actuarially determined contribution levels until 2039, but that figure will climb each year the state fails to make an actuarially sufficient payment. In fiscal year 2023, actuarially determined contributions were less than $14.9 billion, more than $1.1 billion below today’s actuarially determined contribution.
Revenue changes
Most notably, the approved budget implements a series of tax hikes that are expected to cost Illinoisans an additional $1.037 billion in 2025. Taxes paid to local governments will also increase by an estimated $120 million because of the changes.
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