Pritzker threatens to veto any budget containing ‘broad-based’ tax
increase
[May 29, 2025]
By Ben Szalinski and Jerry Nowicki
SPRINGFIELD – Gov. JB Pritzker said Wednesday he will not sign a budget
that includes broad tax hikes to fund new spending as lawmakers are in
the final hours of budget negotiations.
“Anything that’s broad-based and would have a negative impact on working
families, I would veto a budget like that,” Pritzker told reporters.
Pritzker said he would specifically veto any budget that includes tax
increases on individuals, corporations or the sales tax – the three
largest sources of revenue in the state budget. Pritzker also ruled out
a sales tax on services to provide new funding to the state.
Personal income tax growth in Illinois has remained strong, up 10%
through for fiscal year 2025 as compared to the same point in fiscal
year 2024, according to the legislature’s Commission on Government
Forecasting and Accountability. But sales taxes have been stagnant, and
corporate income tax is down 8% for the year.
While Pritzker ruled out “broad-based” tax increases, it’s not clear
whether he’d approve more targeted tax increases, particularly those
that may not directly be paid by “working families.” The governor pushed
about $900 million of targeted tax changes on businesses and sportsbooks
to balance the FY25 budget but proposed only a $100 million tax increase
on electronic gambling and table games at casinos in his FY26 proposal.
Pritzker told reporters he also hasn’t reviewed any possible revenue
sources, including tax increases, to fund a budget gap for Chicago-area
public transportation agencies. Pritzker added he also isn’t pushing
lawmakers to adopt any specific funding sources for it.
Illinois lawmakers are in the final days of negotiations over the fiscal
year 2026 budget set to take effect on July 1. But growing uncertainty
about revenue projections next year has left Democrats in a difficult
spot as they seek funding for programs.
Pritzker proposed a $55.2 billion spending plan to state lawmakers in
February, but revenue projections for FY26 have decreased to $54.9
billion, giving lawmakers even less room to increase spending without
finding more money to pay for it.
Democrats have reviewed lists of possible tax hikes on specific
transactions in closed-door meetings over the last week. It was still
unclear as of Wednesday afternoon which, if any, tax increases would be
included in the final budget proposal.
Democratic leaders have tempered expectations for their members.
“The biggest thing that I’ve said to the caucus pretty consistently
since day one is that no one’s going to get everything they want, that
we have to have reasonable expectations, that we have to balance the
budget,” House Speaker Chris Welch, D-Hillside, told Capitol News
Illinois in a recent interview. “We’re going to spend what we bring in,
no more.”
Republicans have pledged to oppose a budget that includes any tax
increases but aren’t involved in detailed negotiations on the budget.
“The legislature has a great track record of using this time,
squandering time for many months, and using the waning hours of the
legislative session to enact gigantic changes that have real-world
consequences for taxpayers,” Rep. Ryan Spain, R-Peoria, told reporters
last week.
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Gov. JB Pritzker speaks to reporters following an event at the
Illinois State Library in Springfield on Wednesday, May 28, 2025.
Pritzker pledged to veto any budget with “broad-based” tax
increases. (Capitol News Illinois photo by Jerry Nowicki)
Business groups are also concerned about possible tax increases. Sixteen
business groups that lobby state lawmakers signed a letter to senators
on Tuesday asking them to oppose a digital advertising tax.
Such a tax – which hasn’t been officially proposed as legislation –
would impose new costs on businesses that advertise on digital
platforms, such as social media sites.
“While we understand the need to address the State’s projected budget
deficit, taxing digital advertising is a misguided approach that would
ultimately harm Illinois’ economy and disproportionately affect small
and medium-sized enterprises (SMEs) that rely on cost-effective digital
marketing to reach their customers,” the letter said.
The businesses warned that the tax would likely be challenged in court
for violating the Commerce Clause of the U.S. Constitution. If a judge
granted a preliminary injunction preventing the state from collecting
revenue from the tax during a lengthy court battle, the state could be
left with a hole in the budget.
“A digital ad tax might sound like it targets ‘big tech,’ but in
practice, it’s a regressive cost that squeezes the very businesses
Illinois should be empowering. This policy would raise costs, reduce
competitiveness, and stifle growth at a time when many businesses are
dealing with economic uncertainty,” the letter said.
Pritzker made his remarks at a ceremony dedicating the reading room in
the Illinois State Library in honor of former Republican Gov. Jim Edgar,
who is battling pancreatic cancer.
Pritzker recounted his first meeting with Edgar after he was elected
governor in 2018, just months after the state ended a costly two-year
budget impasse between Republican Gov. Bruce Rauner and Democrats in the
General Assembly.
“He said one really important thing to me,” Pritzker recalled. “He said:
you really only have one critical job as governor of Illinois, and
that’s pass a budget.”
Edgar recalled his own budget struggles. He was secretary of state until
1991 when he served as a driving force behind the library building that
sits across the street from the Illinois State Capitol. He’d brokered
the deal with Republican Gov. Jim Thompson.
But, Edgar said, when his team sat down to review the legislation
enacting the public works program that year, funding for the library was
initially absent.
Ultimately, their staffers connected, and the funding was included.
“But what I want to remind you – don’t think just because they told you
a month ago, they’re going to do it,” Edgar said. “They might forget.
So, in the next four days, you better just check on the people who
promised you they were going to do these things.”
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