Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
Governor Pritzker delivered the annual Budget and State of the State Address today (attached to this message) in Springfield. Heading into the address, Illinois faced a projected $3.2 billion revenue shortfall for fiscal year 2026, which begins on July 1. With federal pandemic relief fully allocated and economic growth slowing, tax revenue projections remained largely flat for the coming years.
In November, the Governor’s Office of Management and Budget (GOMB) projected a $3.2 billion deficit for FY 2026 if no changes were made to revenue or spending policies, with total revenue expected to remain at $53.4 billion. The report also warned that funding for new programs would be “severely limited.”
It’s not unusual for GOMB’s annual projections to show deficits in future years. The office historically takes a conservative approach, and projections can change by the time the budget address is delivered. Read more below as those projections have indeed changed and the message of today’s address expresses a slight amount of breathing room.
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$55.4 Billion Budget Plan Unveiled
Governor JB Pritzker has introduced a $55.4 billion budget proposal for the upcoming fiscal year, marking an increase from last year’s $53.5 billion. While the fiscal outlook is not as dire as initially feared, lawmakers will still need to exercise financial restraint.
A brighter-than-expected economic forecast from the Governor’s Office of Management and Budget projects an increase of over $1.5 billion in core revenue. However, nearly one-third of this revenue comes from one-time increases or shifts in expenditure, and the budget does not include any tax hikes.
In November, budget officials had predicted a $3.2 billion shortfall due to flat revenues and increased spending, particularly a $1 billion rise in healthcare costs as federal COVID-relief funds expired. Pritzker now plans to curb spending by eliminating a program that provides medical coverage to non-citizens.
“This year’s budget proposal is balanced and responsible,” Pritzker told the General Assembly. “We’re preserving the progress we’ve made over the last six years, streamlining departments, and delivering for residents without raising taxes.”
Pritzker’s budget emphasizes controlled spending, with discretionary expenditures outside of healthcare, education, and pensions rising by less than 1%. Key allocations include:
- K-12 education: $350 million in additional funding through the evidence-based funding model.
- Higher education: A 3% increase ($46 million) in funding, along with a $10 million increase in need-based scholarships.
- Pensions: A $400 million increase, bringing the total to $10.6 billion. An additional $78 million will be allocated to adjust Tier 2 pension benefits to comply with Social Security requirements.
- Healthcare: Costs for state employees and Medicaid will rise, while a program providing healthcare for noncitizen adults—costing approximately $500 million—will be discontinued.
To generate additional revenue, the plan includes:
- A tax amnesty program yielding $500 million in back taxes.
- Adjustments to casino tax structures returning them to pre-COVID levels.
- Delaying the transfer of motor-fuel tax revenue from the general fund to the road fund.
Pritzker, who has taken pride in passing balanced budgets since taking office six years ago, reaffirmed his commitment to financial responsibility. “I will only sign a balanced budget,” he declared. “If you want to spend more, you need to tell me where you want to cut. I have made difficult decisions, including cutting programs I support, and I know you will have to make hard choices as well.”
Pritzker’s proposal received pushback from Republicans and members of the Black Caucus.
Senate Republican Leader John Curran criticized the governor for expanding government spending. “Rather than ensuring transparency, it relies on the same gimmicks and job taxes that hurt Illinois’ growth,” he said in a statement.
Members of the Black Caucus voiced concerns about the budget’s lack of focus on Black communities. Senator Willie Preston (D-Chicago) stated, “I did not hear enough about what needs to be done to change the trajectory of Black communities across Illinois.” Representative Carol Ammons (D-Urbana) added, “This budget does not reflect what I hope to pass in the spring. We want our money.”
Illinois Republican Party Chair Kathy Salvi dismissed the budget as “yet another massive spending plan relying on pipe-dream projections.”
Pritzker remains optimistic about Illinois’ economy, pointing to job growth and investments from companies like electric-vehicle maker Rivian. However, recent economic data from Moody’s Analytics suggests Chicago’s economy is lagging behind other major cities, with slow employment growth and a rising unemployment rate.
Looking ahead, Pritzker warned of slower revenue growth, with forecasts predicting a modest 1.9% increase in fiscal year 2026. “We must live within our means,” he cautioned. One major concern is the potential reduction in federal funding, which comprises 8% of Illinois’ general fund and nearly one-third of total state spending. President Donald Trump’s policy changes could further impact state finances.
Comptroller Susana Mendoza urged lawmakers to prepare for federal cuts. “We’re in uncharted territory. The federal government could cut billions in aid,” she warned. However, she praised Pritzker for prioritizing fiscal responsibility, including a proposed $250 million addition to the state’s rainy-day fund.
With negotiations ahead, Pritzker emphasized the need for bipartisan cooperation. “We’ve built a stronger Illinois, but lean budget years will continue to challenge us,” he said. The final budget will now be shaped through deliberations in the General Assembly, where lawmakers will determine whether Pritzker’s vision aligns with the state’s financial reality.
Governor Pritzker Proposes $500M for Shovel-Ready Real Estate Development
Governor JB Pritzker is seeking legislative approval for a $500 million initiative aimed at attracting new businesses to Illinois by preparing real estate for development. More than half of the proposed funds would be used to repurpose state-owned properties, such as the former Dwight women’s prison and mental-health facilities in Rockford and Lincoln, into sites ready for private investment.
Kristin Richards, director of the Illinois Department of Commerce & Economic Opportunity (DCEO), emphasized the importance of having shovel-ready sites to meet industry demands. “This initiative is designed to tackle the speed-to-market challenge businesses face,” Richards said. “We aim to provide readily available sites for expansion or relocation projects, whether they involve greenfield or brownfield development.”
Similar to last year’s quantum computing investment, this proposal would be financed through bonds issued under the $45 billion Rebuild Illinois capital plan, separate from the state’s general operating budget. “This funding allows us to expand our resources and stimulate economic growth,” Richards added. “Legislators will assess the proposal in the context of the FY 2026 budget and its alignment with broader financial priorities.”
DCEO projects that the $500 million investment could generate up to $4 billion in private-sector investments. Intersect Illinois, the state’s economic development arm, has already identified 35 vetted sites to market to potential developers. Some of the funds would be used to enhance additional properties and make them more attractive for business investment.
The plan includes targeted site-development efforts to overcome infrastructure challenges that hinder development. Richards cited an example in Mount Vernon, where Manner Polymers invested $54 million in a new manufacturing facility, creating over 60 jobs. The project was made possible by a $2.5 million investment in a rail spur.
Additional funds would be allocated for demolition, remediation, and infrastructure improvements at key state-owned sites, including:
- The 160-acre former Dwight Correctional Center
- The 100-acre Douglas Singer Mental Health Center in Rockford
- The 100-acre Jacksonville Developmental Center
- The 100-acre Lincoln Developmental Center
“These sites already have essential infrastructure, such as roads and utilities, making them prime candidates for redevelopment,” Richards noted.
Despite economic development successes, such as the Illinois Quantum & Microelectronics Park in Chicago and the Gotion battery plant in Manteno, some critics argue that Illinois continues to struggle economically. “The state has lost 60,000 jobs and has the third-highest unemployment rate in the nation,” said state Senator John Curran, a Republican from Lemont.
Pritzker’s proposal will undergo legislative scrutiny as lawmakers consider how it fits into the broader economic and budgetary landscape. If approved, the initiative could provide a significant boost to Illinois’ business attraction efforts, making the state more competitive in securing new corporate investments.
Governor Pritzker Pushes to Expand Four-Year Degree Offerings at Illinois Community Colleges
Governor JB Pritzker is set to propose a major shift in Illinois higher education by allowing select community colleges to offer four-year baccalaureate degrees. The initiative, which he will outline in his budget address on Wednesday, aims to make higher education more accessible, particularly for working adults and residents who live far from a public university.
If approved, the policy would mark a significant departure from the traditional role of Illinois community colleges, which currently offer two-year associate’s degrees and vocational training certificates. However, similar policies are already in place in 24 states, including neighboring Indiana, Missouri, and Michigan.
“There are almost 200 community colleges across the country that are doing this today,” said Martin Torres, Pritzker’s deputy governor for education. “The concept is not new, and many of our own community colleges have advocated for this. We believe it’s time to remove barriers to earning a bachelor’s degree, especially in high-need fields.”
Under the proposal, community colleges would be authorized to offer four-year degree programs in specific high-demand industries, such as health care, early childhood education, and advanced manufacturing. The Illinois Board of Higher Education and the Illinois Community College Board would need to approve each program to ensure they align with workforce needs and serve students who are currently underserved by traditional higher education institutions.
To maintain affordability, the plan includes a tuition cap: community colleges would not be allowed to charge more than 150% of their standard tuition rate for the third and fourth years of a bachelor’s program. This pricing structure is significantly lower than that of Illinois public universities, which charge nearly three times the cost of community colleges, and private universities, which charge more than six times as much.
Illinois currently has 15 public universities, including three medical schools, but only two—Southern Illinois University’s Carbondale and Edwardsville campuses—are located south of Interstate 70. In contrast, the state’s 39 community college districts are spread more evenly across Illinois, making them a practical solution for students who cannot relocate for a four-year program.
Torres emphasized that this proposal is particularly aimed at non-traditional students. “Students in these programs tend to be older, more diverse, and managing personal circumstances that prevent them from moving to attend a four-year university,” he said.
It remains unclear how Illinois’ public universities will respond to the proposal, as community colleges offering four-year degrees could introduce competition for enrollment. However, Torres pointed to Florida—one of the first states to adopt community college baccalaureate programs—where no evidence suggests a negative impact on public university enrollment.
The plan does not include additional state funding for new degree programs. Instead, it grants community colleges the authority to create bachelor’s programs, leaving it up to each institution to determine how to fund their expansion.
Pritzker’s initiative is separate from other higher education reforms currently being considered in the General Assembly, including a proposed overhaul of the state’s university funding system. Those reforms aim to implement an Evidence-Based Funding model similar to what is used for PreK-12 education.
With this proposal, Pritzker seeks to close educational gaps and provide more Illinois residents with access to affordable, four-year degrees—without requiring them to leave their communities.
Governor Pritzker Backs ‘Screen-Free Schools’ in Push to Ban Cellphones in Illinois Classrooms
Governor JB Pritzker is set to endorse a statewide ban on cellphones in classrooms, a move aimed at improving student achievement, social interaction, and mental health. The proposal aligns with a growing national trend, as states across the political spectrum increasingly limit cellphone use in schools.
Pritzker’s deputy governor for education, Martin Torres, confirmed that the governor will highlight the “screen-free schools” initiative during his State of the State and Budget address on Wednesday. The proposal, backed by legislation in both chambers of the General Assembly, would require school districts to establish policies banning personal wireless devices during instructional time, with certain exceptions. It also mandates secure but accessible storage options for phones and tablets and a review of the policies every three years.
Illinois joins a wave of states considering or implementing cellphone restrictions in schools. Currently, eight states enforce policies limiting in-class cellphone use, while 15 others, including Indiana, Minnesota, Ohio, Iowa, Kentucky, and Michigan—have introduced similar measures. A study by the Pew Research Center found that 70% of U.S. high school teachers consider cellphone distractions a major issue in classrooms.
Torres pointed to positive outcomes in at least 10 Illinois school districts that have already adopted screen-free policies. “Students are more engaged, more attentive in class, and participation in classroom discussions has improved,” he said. “Reducing screen time and social media exposure can also help address issues like anxiety, depression, and body dissatisfaction among students.”
The proposed policy, set to take effect by the 2026-2027 school year, gives school districts flexibility in crafting their own approaches. Under Pritzker’s plan, personal devices would be prohibited during instructional periods except in emergencies, situations involving security threats, or when approved by teachers. Exceptions would also be made for medical needs, special education plans, and language learning support.
One example of a successful implementation comes from Peoria Public Schools, which introduced a system this school year requiring students to lock their phones in neoprene pouches that can only be opened by teachers or administrators. Midway through the year, a survey of 8,000 students from grades 5 to 12 reported increased focus, higher engagement, and fewer distractions.
Superintendent Sharon Desmoulin-Kherat highlighted the impact, sharing an email from a teacher who noted, “I am looking into students’ eyes who have never looked up from a screen before.”
Illinois has previously taken a firm stance on cellphone use in schools. In the 1990s, cellphones were outright banned, largely due to concerns over illegal activities. However, as mobile technology evolved into an essential tool for communication, the state reversed course in 2002, allowing students to bring phones to school.
Now, as the conversation shifts toward minimizing distractions and promoting student well-being, Pritzker’s initiative seeks to strike a balance between accessibility and academic focus. While some parents have expressed concerns about reaching their children in emergencies, Desmoulin-Kherat reassured them that traditional communication channels remain available.
“Just like the old days, you can call the office or send an email,” she said. “Students don’t need their cellphones in class to stay connected with their families.”
Gia Biagi Takes the Helm at IDOT, Aiming for ‘Good Disruption’
Gia Biagi, known for her work in urban planning and park development, has stepped into a new leadership role as the acting director of the Illinois Department of Transportation (IDOT). Appointed by Governor JB Pritzker in December, Biagi replaced former Secretary Omer Osman and took charge in mid-January. Now, she oversees a vast network that includes 145,000 miles of roads, 7,000 miles of railways, 1,000 miles of waterways, and 26,000 bridges, as well as managing a five-year, $29.7 billion plan to maintain and improve the state’s highways.
Though Biagi may not be a household name across Illinois, she is well-regarded in Chicago’s urban planning and transportation circles. She began her career under Chicago Mayor Richard M. Daley before moving to the Chicago Park District, where she played a key role in developing projects like Maggie Daley Park, the 606 trail, and the redevelopment of Northerly Island.
Following her time with the Park District, Biagi joined Studio Gang, a renowned architecture firm, where she worked on the redevelopment of Tom Lee Park in Memphis. She later led the Chicago Department of Transportation (CDOT) for nearly four years, overseeing the expansion of bike lanes, the Divvy bike rental program, and a $3 billion capital plan.
Biagi’s predecessor, Omer Osman, spent nearly three decades at IDOT before becoming secretary in 2019. Under his leadership, IDOT implemented the Rebuild Illinois plan, a $44.8 billion infrastructure package that expanded the department’s focus beyond highways to include transit, railroads, ports, and cycling infrastructure.
Biagi is stepping into the role at a crucial time, as IDOT implements a multi-year plan allocating $41.4 billion to highway, rail, and transit improvements from fiscal years 2025 to 2030. Of that, $23 billion is earmarked for state road maintenance and expansion, $6.7 billion for local highway projects, and $11.8 billion for multimodal projects.
Her goal? Speeding up project completion while maximizing community benefits. “It’s our job not only to get that money spent but to get shovels in the ground, put people to work, and complete projects as quickly as possible,” Biagi said. “That may mean more disruption, but hopefully the kind that leads to positive change.”
Beyond efficiency, she aims to ensure projects enhance local communities by improving travel conditions and job opportunities. “If people have what they need, and we can break ground on projects, which means jobs, economic impact, and a better quality of life,” she noted.
Biagi also wants to build stronger, long-term relationships with communities, ensuring that IDOT’s work goes beyond large-scale highway projects to address everyday transportation challenges at a local level.
One of the most high-profile projects under Biagi’s oversight is the proposed redevelopment of Jean Baptiste Pointe du Sable Lake Shore Drive in Chicago. For over a decade, IDOT and CDOT have debated options for redesigning the northern portion of the iconic roadway, with a final decision expected this year. As a former CDOT commissioner, Biagi has a unique perspective. “I’ve been on both sides of this,” she said. “This is a legacy project, one that will define Chicago’s infrastructure for the next century.”
In 2023, IDOT selected a preferred redesign plan that excluded dedicated public transit lanes, drawing criticism from lawmakers and transit advocates who argued for a more pedestrian- and cyclist-friendly boulevard. While Biagi has yet to take a firm stance on the issue, she emphasized IDOT’s willingness to collaborate. “It’s our job to listen and work with the city to get this right,” she said.
A significant portion of IDOT’s funding comes from the federal government, with roughly half of the current $29.7 billion road budget and 40% of multimodal project funds reliant on federal support. However, the recent transition in the White House has introduced uncertainty.
On February 6, the U.S. Department of Transportation suspended funding for the National Electric Vehicle Infrastructure (NEVI) program, a $5 billion initiative established under the 2021 Infrastructure Investment and Jobs Act. Illinois had expected over $100 million in NEVI grants, but with the program now under review, the future of these funds remains unclear.
Governor Pritzker has signaled potential legal action if federal payments under contract are withheld, though the state has yet to take formal steps. Meanwhile, Biagi is taking a diplomatic approach, saying she’ll allow the new administration to “find its footing” while seeking collaboration. “Infrastructure is a bipartisan issue,” she said. “We’re going to be patient and look for opportunities to work together.”
As Biagi settles into her role, she remains focused on accelerating infrastructure projects, fostering community engagement, and navigating federal funding uncertainties. With ambitious plans ahead, she hopes to turn potential disruption into meaningful progress for Illinois’ transportation system.
State Officials Debate Renewable Energy Investments Amid Rising Costs and Growing Demand
As Illinois faces increasing electricity demand and concerns over its ability to meet renewable energy goals, state regulators and lawmakers convened on Tuesday to discuss the future of energy regulation and investment.
Jonathan Feipel, Executive Director of the Illinois Commerce Commission (ICC), emphasized the urgency of developing renewable energy sources, expanding energy efficiency programs, and implementing new pricing mechanisms. He acknowledged concerns over potential energy shortages by 2030 but remained optimistic that proactive measures could keep Illinois on track. “If we all sat and did nothing, we would have a significant problem when we get to 2030,” Feipel told lawmakers. However, he stressed that investments in renewable energy would ultimately reduce costs for consumers.
Brian Granahan, Director of the Illinois Power Agency, echoed Feipel’s stance, arguing that expanding local energy generation would ease price pressures. “The best thing that we can possibly do is to make sure we’re making investments in generation in Illinois because that will ultimately put downward pressure on prices,” Granahan said.
Rep. Carol Ammons (D-Urbana), chair of the House Energy and Environment Committee, expressed her commitment to refining and expanding existing energy laws, including the 2021 Climate and Equitable Jobs Act (CEJA) and the 2016 Future Energy Jobs Act (FEJA). These laws mandate Illinois’ transition to 100% clean energy by 2050 and establish funding mechanisms for renewable projects. “Balancing the things that are working with CEJA and tweaking where they are not,” Ammons said, adding that workforce diversity in the renewable sector would be a priority.
Despite the push for clean energy, Republican lawmakers voiced concerns about rising costs and reliability. Rep. Dave Severin (R-Benton) stated his continued support for coal, while Rep. Brad Halbrook (R-Shelbyville) argued that CEJA had led to higher prices, reduced reliability, and job losses. “Republicans talked about what would happen if CEJA was enacted — that energy costs would go up, we would have less reliable sources of energy, and it would drive jobs out of the state,” Halbrook said. “All those things have happened.”
Indeed, electricity prices in northern Illinois reached their highest levels in over a decade during the summer of 2024, according to the Bureau of Labor Statistics.
To mitigate energy supply challenges, lawmakers are expected to consider several policies before the legislative session ends in May. Key proposals include expanding energy efficiency requirements to Ameren, the primary electric utility in downstate Illinois, bringing it in line with Commonwealth Edison (ComEd), which serves northern Illinois.
Illinois Environmental Council Executive Director Jen Walling noted that a near-agreement on energy efficiency was reached in January’s legislative session. “In lame duck, we were very close on an agreement on energy efficiency — putting Ameren on parity with ComEd,” Walling said.
Battery storage, which was notably omitted from CEJA, is also expected to be a focal point of upcoming legislation. Feipel highlighted its importance in stabilizing energy supply from renewable sources., “You’ll see proposals on battery storage coming through the General Assembly — probably this session,” Feipel said.
A major driver of rising energy demand is the proliferation of data centers, which require substantial electricity to power artificial intelligence applications, stock exchanges, and other high-tech industries. According to Feipel, these demands “came out of nowhere” and present a “critically important” challenge.
Consumer advocates worry that data centers will increase electricity costs for residential customers. A recent report from environmental and consumer groups examined the impact of data centers on the energy grid and utility rates, highlighting concerns over subsidization.
“We should think twice about promoting those developments here,” said Abe Scarr, Energy and Utilities Program Director at PIRG. “Tax credits should end right away. We should slow down instead of incentivizing further.”
Between 2019 and 2023, Illinois approved $468 million in tax incentives for data centers, with annual costs rising to $370 million by 2024.
As lawmakers navigate the complexities of Illinois’ energy future, they will need to balance affordability, reliability, and sustainability. Feipel remains optimistic that solutions like expanded renewables, battery storage, and energy efficiency programs will address these challenges. “This is a real challenge that I think we’re facing,” Feipel said. “And I don’t think it’s insurmountable.”
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
[email protected]
815.727.5371 main
815.727.5373 direct