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Archive for the ‘Illinois Policy Institute’ Category

Gov. J.B. Pritzker wants more federal funding. A new program would provide donor money— but he must opt in.

By Mailee Smith | Illinois Policy Institute

Gov. J.B. Pritzker wants a bipartisan effort from Illinois lawmakers to demand more education money from the federal government.

Yet Pritzker himself hasn’t taken a simple step to get more funding for Illinois students.

If he wants to keep money in Illinois and away from the Trump administration, the answer is easy: Opt into the Federal Scholarship Tax Credit Program, which provides a tax credit to donors who give money that can go to public, private or homeschool students.

If the governor doesn’t opt in, that money will flow out of the state — exactly where he doesn’t want it to go.

Pritzker demands more money from the federal government

Pritzker didn’t mince words in his annual budget address last month. He blames the Trump administration for stripping Illinoisans of billions of dollars — and he wants it back.

“I want to say to anyone on either side of the aisle: If you want to talk about our (fiscal) 2027 budget, you must first demand the return of the money and resources this president has taken from the people of Illinois,” he said.

Two days later, the governor sent a letter to President Donald Trump demanding a refund of $1,700 for every Illinois family. The letter followed the U.S. Supreme Court’s decision striking down the presidents’ tariffs. Pritzker says the tariffs have cost Illinoisans over $8.6 billion.

But Pritzker has the means to keep at least some Illinois tax money from flowing to Washington. The Federal Scholarship Tax Credit Program would do exactly what he wants: keep money in the state while costing nothing.

To do that, he must opt into the program.

Pritzker could get more money for kids

The Federal Scholarship Tax Credit Program provides a dollar-for-dollar annual tax credit up to $1,700 for donors to scholarship-granting organizations. Those organizations then provide money to eligible public, private or homeschool children for tutoring, fees for dual enrollment, educational therapies for students with disabilities and other academic needs.

It’s a win-win-win: Students get much-needed education funding, donors get tax credits, and no money is diverted from public schools.

Pritzker must opt the state into the program for students to get the money. Donors will get the tax credit even if he doesn’t.

If Pritzker doesn’t act, that money will go out of Illinois — either to students in other states as education donations or to the federal government in the form of taxes.

To date, at least 28 states have indicated they will opt into the program.

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The state’s data center boom is reshaping energy, water use and taxes. Here’s what residents should know about the costs, jobs and incentives involved.

By Brennan Park | Illinois Policy Institute

Data centers are expanding across Illinois amid the tech industry’s rising demand for cloud computing. Supporters say the facilities bring investment and jobs, while critics worry about rising energy costs, environmental effects and tax incentives.

Illinois lawmakers are considering passing more stringent regulations on the growth and operation of data centers, with bills recently introduced in the House and Senate. These bills would require “hyperscale” data centers to expand renewable energy and “strengthen equity, transparency, and labor standards in clean energy initiatives,” among other new rules.

Here’s what every Illinoisan should know about the data center boom and tradeoffs the state makes to be a part of it.

1: Illinois is already a major data center hub, with the growth accelerating

Illinois boasts the fourth-highest number of data centers in the country, at 244 sites. That’s because the state provides much of what data center developers need: energy, environment and space.

These facilities need large amounts of reliable, clean electricity. They also require a cool, stable climate and ready access to water to prevent overheating. Illinois’ weather, rivers and proximity to Lake Michigan provide those conditions.

Flat land and industrial sites also make it easier and cheaper to build large-scale facilities. Illinois has a lot of both.

Most of the current development is concentrated in Chicago and its suburbs, with new projects from companies such as STACK InfrastructurePrime Data Centers and Prologis.

Aurora is home to Prologis Project Steel, with 24 completed data center buildings, and Project Cardinal, with 14. Southern and central Illinois are also proving attractive. CyrusOne is slated to host a 600-megawatt data center campus in Springfield, one of the largest proposed in the state.

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Related: 110 Acre AI data center campus pitched to Village Board

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At least 49 tax hikes under Gov. J.B. Pritzker have driven state spending to record highs, even as Illinois’ economic growth has lagged the U.S.

By Ravi Mishra | Illinois Policy Institute

Illinois lawmakers frequently boast about economic growth and development, yet Illinois has posted one of the slowest gross domestic product growth rates in the nation while the budget has soared.

Illinois’ budget doesn’t reflect economic reality

Illinois’ budget has grown at an alarming rate during Gov. J.B. Pritzker’s tenure. While government spending is a component of GDP, rapid increases in public spending can crowd out private economic activity. Higher taxes used to finance this public spending can hurt consumption and private investment, a dynamic that seems to be playing out in Illinois.

Since 2018, Illinois’ economy has grown just 7.4% – among the slowest of any state. In that same time, the state budget has grown over 36%, nearly five times faster than the economy. The U.S. economy has grown 18%, 2.5 times faster than Illinois’.

If not the economy, what has driven the state’s budget surge?

Pritzker’s administration has enacted at least 49 tax hikes since 2019. Some of the most egregious examples include:

  • Doubling state gas taxes and tying annual increases to inflation thereafter, creating a $3.3 billion surplus in the state’s road fund.
  • Halting the repeal of the franchise tax, which had been agreed to in 2019.
  • Capping the retailers’ discounts – the portion of sales taxes retailers were allowed to keep as reimbursement for collecting the taxes – effectively raising sales taxes on brick-and-mortar businesses.

Not only have these hikes hit taxpayers and employers but have also weighed down Illinois’ economic performance. Illinois already has had among the highest corporate tax rates in the country, but recent changes have only made the system more complex and burdensome. The tax environment has led to the state losing businesses, and combined with high overall burden, has contributed to years of population decline.

Read more here.

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Illinois local governments lost out on over $10.9 billion in income tax revenue since fiscal year 2012. Here’s what your city or county lost.

By Patrick Andriesen | Illinois Policy Institute

Illinois local governments lost out on more than $10.9 billion in income tax revenue since fiscal year 2012, thanks to state lawmakers cutting the share of income taxes promised to municipalities and counties.

The state kept the difference.

An Illinois Policy Institute analysis found state lawmakers’ decision to reduce the local share from 10% of net income tax collections to less than 7% has cost municipalities over $9.49 billion since FY 2012. That includes cities, towns and villages and meant fewer dollars for programs and services, infrastructure, and potential property tax relief.

Use our table below to find out how much more income tax revenue your municipality would have received.

In addition to the municipal losses, county governments lost another $1.43 billion. Use our table below to find out much more income tax revenue your county would have collected.

More here.

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Cook County homeowners face rising property taxes. Three-fourths of that money is going to police and fire pensions instead of services.

By LyLena Estabine | Illinois Policy Institute 

Property tax bills (were) due Dec. 15th, and Cook County homeowners are facing tax bills that have grown 16%.

With more money being collected, it makes sense residents would expect better services from the public safety institutions funded by their tax dollars, such as police and fire departments. But Illinois Department of Revenue data from 2023 shows 74% of the money for these entities is going to fund pensions, with little left for public safety.

Cook County weighed down by police, fire pensions

Municipal police and fire department property tax levies for Cook County, 1996-2023, adjusted for inflation and excluding Chicago

Since 1996, the amount of money municipalities in Cook County outside of Chicago have levied to keep up with police and fire pensions has grown nearly five times. The amount levied to keep up services has not even doubled.

Police and firemen receive generous pensions, and rightly so given the dangerous nature of their work. When those benefits become overpromised – as they have become in Illinois – they undermine retirement security and reduce the amount of money available for service.

More here.

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More people still moved out of Illinois than moved in during 2025, but the gap was smaller than it’s been for the past 16 years, according to Atlas Van Lines.

By Patrick Andriesen | Illinois Policy Institute

Illinois’ outbound migration crisis slowed after 16 years of losses, with new data from Atlas Van Lines showing a smaller gap between moves in and moves out of the state in 2025 than in any year since 2008.

While the Atlas report was an improvement, other moving companies reported bleaker results.

The new Atlas report found 54% of the company’s clients moved out of Illinois during 2025 while 46% moved into Illinois. The company considered that gap to be statistically even, but said a big factor behind the ratio could be “overall mobility remains low today, primarily due to affordability constraints such as the high cost of home ownership and limited inventory.”

Previous Atlas studies found Illinois lost residents every year between 2009 and 2024, with the trend peaking at 63% of movers leaving in 2023. The company has tracked client relocations every year dating back to at least 1993.

Other moving companies also produce similar surveys that show Illinois as a place to leave. Allied Van Lines shows a 58% outbound rate for 2025, ranking Illinois No. 1 for losing people. United Van Lines data is reported in January, and it last reported 60% of its moves in 2024 were out of Illinois, ranking No. 2 in the nation.

Atlas reported the U.S. states with the highest rates of individuals moving in were Arkansas followed by Idaho. Louisiana saw the highest rate of people leaving, followed by West Virginia.

Read more here.

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Chicago-area drivers could end up paying $1 billion more in tolls each year as part of a deal state lawmakers admitted was made to get labor union support.

By Patrick Andriesen and Ravi Mishra | Illinois Policy Institute

Illinois drivers face up to $1 billion more in tollway fees per year – money the tollways do not need – as part of a deal Springfield leaders admitted they made to get labor unions to back a Chicago-area mass transit bailout.

The Illinois Tollway board could vote as soon as Dec. 18. It would take an extra $329 per year from the typical driver.

Analysts estimated the 45-cent spike will drive the average passenger toll to $1.24, leading to $329 yearly increase for the typical commuter starting in 2027. Commercial truckers could also find themselves paying $1.73 more, or $1,264 a year.

Starting in 2029, tollway fees will automatically rise with inflation with a 4% cap per year applied every two years, regardless of the actual tollway needs. The automatic hikes make it hard for voters to hold lawmakers responsible for the hikes and will swell the tollway coffers.

That kind of automatic hike was applied to the state’s gas tax, leading to a $3.3 billion surplus and record-high taxes thanks to Gov. J.B. Pritzker. Illinois’ gas tax were 19 cents before he doubled them and added the inflationary hikes, putting the tax at 48.3 cents per gallon currently.

The Illinois Tollway Authority was initially sold to voters as a temporary way to fund new highways: “Toll free in ’73.” That was intended to be 1973, but with the automatic hikes will likely still be going in 2073.

The tollway hikes were not needed but rather a gift to reward labor unions for supporting the Regional Transportation Authority bailout of Chicago area mass transit. Illinois House Speaker Chris Welch said the toll hike was the price Illinoisans had to pay for labor union support.

“It was important to them, if they were going to agree to give up almost $1 billion dollars a year from the road fund, that they can point to something that will help keep working people working and keep roads getting repaired,” Welch told the Chicago Sun-Times.

Read more here.

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Chicago-area transit riders deserve safe, reliable service. But the Regional Transportation Authority board might soon ask the wrong people to pay for it.

By Dylan Sharkey | Illinois Policy Institute

Illinoisans shouldn’t be taxed for a service they can’t use, but the Regional Transportation Authority board is expected to vote on doing just that: imposing a regionwide sales-tax increase.

The board will meet Dec. 18 to adopt its 2026 budget, which relies on raising the RTA sales tax by 0.25 percentage point across Cook County and the collar counties. Pritzker is expected before 2026 to sign the bill authorizing the tax, which would take effect July 1 and then need final transit board approval within 60 days.

Supporters argue it’s needed to avoid looming service cuts and big fare hikes tied to transit’s “fiscal cliff.” But the tax collects money from suburban shoppers with sparse transit options and sends it to the urban areas where agencies have made poor decisions and failed to enact needed change. It also lets leaders ignore existing funds already taken from taxpayers.

What is the RTA sales tax?

To fund CTA, Metra and Pace, residents in areas served by mass transit currently pay:

  • 1% sales tax on general merchandise in Cook County.
  • 1.25% sales tax on qualifying food, drugs, and medical appliances in Cook County.
  • 0.75% sales tax on general merchandise and qualifying food, drugs, and medical appliances in DuPage, Kane, Lake, McHenry and Will counties.

If Pritzker and the RTA board approve, the 0.25% will be added to all three existing sales taxes to generate $478 million leaders claim is needed to avoid transit’s fiscal cliff. That fiscal cliff is mostly a Chicago Transit Authority problem: Metra and Pace serve the suburbs and have challenges of their own, but the CTA dominates the RTA’s budget.

Penalizing people who don’t use CTA is a problem when it takes the biggest share of the budget. Part of the funding solution is using money from the state’s road fund, which has more than $3 billion taxpayers have already contributed. The state should spend what it already has before taking more.

Read more here.

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As state lawmakers look to plug budget holes by removing limits on state income tax rates, Illinois’ spending is set to continue breaking records.

By Ravi Mishra | Illinois Policy Institute

The state budget has grown by 35% since 2020, but Illinois lawmakers want more and hope to get it by amending the Illinois Constitution so they can potentially tax retirees and target income groups of their choosing.

The proposed amendment would end Illinois’ longstanding flat income tax. Supporters claim it would relieve property tax pressures and boost school funding. But voters statewide rejected progressive tax schemes because they promised to hit retirees, family farms and small businesses hard.

The flat tax makes it painful for state lawmakers to raise taxes, because when they do all taxpayers suffer and hold them responsible at the next election. Killing the flat tax gives lawmakers the power to divide and conquer taxpayers.

Illinois has record spending

The problem is not income but rather spending: Illinois’ budget has grown at an alarming rate. An influx of federal pandemic funds marked for temporary relief allowed lawmakers to add billions into the general funds baseline spending.

Since 2020, Illinois’ annual general funds spending has increased by over $15 billion and is projected to grow another $7 billion by 2029. That would mark a 55% spending increase in just 10 years.

With the state projecting nearly $11 billion in budget deficits through 2029, this level of unchecked spending is unsustainable.  That is, unless state lawmakers can force more taxation on Illinoisans.

Read more here.

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Illinois lowered its standards in 2025, but over half of third graders still couldn’t read at grade level. It’s a critical milestone. See how your students did.

By Hannah Schmid | Illinois Policy Institute

Even under loosened proficiency standards, over half of Illinois third graders couldn’t read at grade level in 2025.

How well did your local public school prepare children to read by the critical third-grade milestone?

Assessment data from spring 2025 shows Illinois students across grades continued to struggle to read.

But the data is particularly concerning when it comes to third graders.

If a child has not learned to read by the end of third grade, that child is likely to struggle throughout his or her education. That’s because fourth grade is when students move from learning to read to reading as their main method of learning.

Clearly, there is a literacy crisis in Illinois, and it threatens the future of Illinois’ children.

Read more here.

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