Pritzker's $55 billion Fiscal Year 2026 budget: Breaking down proposed investments, cuts

SPRINGFIELD, Ill. (WAND) — Gov. JB Pritzker proposed a $55.2 billion spending plan for Fiscal Year 2026 during his State of the State and budget address Wednesday. The budget includes massive investments for education and housing, but ends a program providing free health benefits for immigrant adults.

JB Budget — The budget includes massive investments for education and housing but ends a program providing free health benefits for immigrant adults.

The governor's seventh budget proposal is a roughly $2 billion increase in spending over the current budget.

Just over a quarter of the spending plan would go to education, including nearly $9 billion for the K-12 evidence-based funding model. It also features a $1.3 million increase for career and technical education programs to expand access for underserved students. $3 million was included for implementing the state literacy plan.

"While this is a year for tightening our belts, we've made real progress toward giving every Illinois child the support they need to live a healthy, prosperous life," Pritzker said. "Let's not lose that forward momentum."

Pritzker also plans to invest over $21 million for the Illinois Department of Early Childhood, which is set to be fully operational on July 1. He earmarked nearly $750 million for early childhood block grants to help even more young children get into preschool during the third year of his Smart Start Illinois program. Roughly $200 million will go toward early childhood workforce wages, a $90 million increase over the current budget investment.

"Last year, we lowered taxes on parents when we enacted the Child Tax Credit and permanently eliminated the state grocery tax - together saving Illinoisans more than half a billion dollars per year," Pritzker said. "This year, we are going to need to do even more to address high prices and counteract Trump's tariffs that will raise taxes on working families."

The spending plan includes over $282 million in housing investments, with $91.5 million for shelters and other services for unhoused people. Pritzker would also like to see lawmakers approve $62 million for supportive housing and homelessness prevention. $50 million could also go toward court-based rental assistance.

"Amid the construction supply chain challenges of the past few years, along with higher interest rates, Illinois' housing inventory decreased more than the national average," Pritzker said. "That's got to change."

The Democrat is calling for nearly $30 billion to address medical assistance for 3.5 million Illinoisans on Medicaid. Pritzker plans to use $132 million to provide free health benefits to immigrant seniors. However, the governor is ending the state's free healthcare program for immigrant adults ages 42 to 64.

"I have made difficult decisions, including to programs I have championed, which is hard for me, just as I know some of the difficult decisions you will have to make will be hard for you," Pritzker noted.

The Pritzker administration also proposed a $40 million boost in funding to maintain programs and services surrounding the Reimagine Public Safety Act as federal COVID-19 funding are depleted. The funding could help with violence prevention, high-risk youth intervention and youth development programs among others.

Pritzker is also calling for $180 million for the Restore, Reinvest and Renew (R3) program and $16.3 million for community-based violence prevention programs. He has earmarked $10 million for a law enforcement co-responder pilot program as well.

Pritzker's FY26 budget proposal includes $10.6 billion to meet the state's pension obligations and $154 million for the rainy day fund. Lawmakers on both sides of the aisle were glad to hear the plan did not include income or service tax hikes.

The Democrat is proposing several other revenue enhancements to generate half a billion dollars in new money. The Pritzker administration said lawmakers could reinstate the delinquent tax payment incentive program, pause the shift of sales tax on the Motor Fuel Tax for one year, and tweak the tax structure for Illinois casinos.

His plan also features $500 million in state capital funding to develop idled properties into economic development hubs. The Jacksonville Developmental Center, Lincoln Developmental Center and a 70-acre section of unutilized land at Shapiro Developmental Center in Kankakee are included in the governor's list for potential projects.

The Pritzker administration explained $300 million would support the new CMS surplus to success program to prepare the idle state properties for development. The remaining $200 million would go to the Illinois Department of Commerce & Economic Opportunity to target investments for large-scale business attraction efforts, continued funding for the regional site readiness program and funding to support energy infrastructure projects.

The Illinois House and Senate will hold hearings for state agencies to present their budget ideas over the coming months. Lawmakers need to pass the budget out of both chambers before session ends on May 31.