The Governor's Office of Management and Budget announced Wednesday that it has lowered the revenue projections for Fiscal Year 2026.

SPRINGFIELD, Ill. (WAND) — State lawmakers will likely need to tighten the belt on spending for the next budget.

The Governor's Office of Management and Budget announced Wednesday that it has lowered the revenue projections for Fiscal Year 2026. GOMB officials predict the state could generate $55.8 billion, but that is $173 million lower than projections made in February.

Meanwhile, the Illinois Commission on Government Forecasting and Accountability predicts the state will bring in $55.3 billion, which is $190 million below COGFA's projections in March.

"It's important to remember that our numbers are based on current law," said COGFA Executive Director Clayton Klenke. "For a true comparison for the FY27 numbers, you have to back out the proposed revenue and transfer changes that are included in the governor's introduced budget."

The Illinois Department of Revenue told lawmakers Wednesday that the war in Iran, tariffs and the job market have significantly impacted the state's revenue for the current fiscal year.

"People are spending less money, people have more credit card debt than ever, the tariffs are up, the war in Iran, gas prices are up," said Sen. Rachel Ventura (D-Joliet). "People only have so much money. To see the impact on that, we're seeing the data now."

Deputy Governor Andy Manar said the state needs to remain focused on fiscal discipline as the entire country grapples with economic and geopolitical uncertainty that the Trump administration created. 

"That latest estimates show that our ability to increase spending beyond the Governor's introduced level is limited," Manar said. "As negotiations continue with our partners in the General Assembly, the Governor's Office will remain focused on fiscal responsibility while mitigating the impact of federal cuts to core services." 

Yet, progressive Democrats and advocates from the Illinois Revenue Alliance stressed this update shows lawmakers need to create multiple new revenue streams to ensure funding needs are met. They hope to create a billionaire wealth tax, a digital advertisement tax and close corporate tax loopholes, among other options, to generate roughly $4 billion annually. 

State lawmakers need to pass the Fiscal Year 2027 budget out of both chambers by May 31. 

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