Washington's threats to state and local government funding took center stage when Illinois Gov. JB Pritzker Wednesday delivered his seventh budget address to a joint session of the legislature in Springfield.
Also high on Pritzker's list of concerns was slowing economic growth, which he said means "difficult decisions, including [about] programs I have championed.
"I'm not going to base a budget on bloated revenue estimates," Pritzker said. "We have to live within our means."
New discretionary spending is increasing by less than 1% in the $55.2 billion 2026 budget Pritzker outlined.
The
In fiscal 2030, $6 billion of 2017 general obligation bonds will be retired, and in 2033, $10 billion of 2003 pension funding GO bonds will be retired, according to the budget. Pritzker wants to dedicate half of the revenue currently being used to pay off the 2017 and 2003 bonds to make extra payments to the state pension systems once those bonds are retired.
The state's GO bonds are rated A-minus with a stable outlook by Fitch Ratings and S&P Global Ratings and A3 with a positive outlook by Moody's Ratings.
The governor minced no words about the Trump administration in his speech, while also vowing to keep Illinois competitive on jobs and housing and defend priorities like public education and building the state's rainy-day fund.
Pritzker slammed "Donald Trump's and Elon Musk's plan to steal Illinois tax dollars."
In the near term, Pritzker cautioned the state budget can't compensate for the damage from frozen or clawed-back federal funds, warning "this is going to affect your daily lives."
In what looked like a prophetic line, Pritzker said, "Only an idiot would think that we should eliminate emergency response in a natural disaster," one day before news broke that the Trump administration is
Pritzker noted that Illinois has paid down more than $12 billion in debt, secured nine credit upgrades, built up a $2.2 billion rainy-day fund, earned the number two ranking in the nation for corporate expansions and relocations and grown to the fifth largest economy in the U.S.
Still, he said, with supply chain challenges and higher interest rates, Illinois' housing inventory has decreased more than the national average. A housing affordability committee he convened proposed reforms, and Pritzker asked the general assembly to implement their recommendations.
"The governor made it very clear that we need to protect the state's rainy-day fund, which I wholeheartedly agree with," state Comptroller Susana Mendoza, who was present for the speech, told The Bond Buyer. "As much as people would love to be able to do a lot of fun things for their district, this is not the year for that.
"I think this budget season is even tougher than what we heard today," Mendoza warned. "We're going into a time of instability and unpredictability. It still doesn't account for cuts from the federal government in the future, which are likely coming to Illinois."
Mendoza said she worries the federal government will claw back funds used in the state budget after it passes. This is the first time states have had to fear that their budgets will be hobbled by the federal government cutting revenues they'd anticipated, she said.
"I don't care the political party, if your kid is up for cancer treatment, I don't want your child to lose those funds; people don't think about this unless it impacts them directly, but I think about it all the time," she said. "We're going to find out midway through as our budget is already being implemented."
Maurice Scholten, president of the Taxpayers' Federation of Illinois, noted approvingly the executive budget makes the required public pension system contributions, "identifies difficult programmatic cuts" and avoids broad-based tax increases. He called on budgeting teams to make "politically difficult" decisions and simplify tax structures.
"The governor's speech today is also a reminder that Illinois taxpayers bear the cost of decisions made at the Capitol," Scholten said. "Lawmakers must consider the complexity of Illinois' tax structure and their constituents' obligation to accurately and timely comply with the law."
