Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
Today’s roundup contains a number of updates on various subjects such as University admissions, transit funding, housing, and education funding.
*Government Affairs Roundup brought to you by CITGO*
Illinois Launches Direct College Admissions Program for Most Public Universities
Starting in the 2027-28 school year, Illinois students with strong academic performance will be automatically admitted to most of the state’s public universities — no applications required.
Governor Pritzker signed legislation establishing a direct admissions program, a major step in his broader effort to expand access to higher education. The program eliminates a significant barrier for college-bound seniors by streamlining the admissions process and providing automatic offers of admission to qualifying students.
Under the new law (House Bill 3522), eligible high school seniors and community college transfer students can opt in to receive direct admissions offers from participating universities based on their grade point averages. Students must still indicate interest in the program, but they will not have to apply individually to each school.
Sen. Christopher Belt (D-Swansea) said the program “takes away the anxiety” from the college application process. “You will receive offers from the schools that you are admitted to without raising a finger. That’s huge,” he said.
Nine of the state’s 11 public universities will take part in the direct admissions program:
- University of Illinois Springfield
- Southern Illinois University
- Chicago State University
- Eastern Illinois University
- Governors State University
- Illinois State University
- Northeastern Illinois University
- Northern Illinois University
- Western Illinois University
Notably, the University of Illinois Urbana-Champaign and University of Illinois Chicago will not participate. However, those schools will be included in a broader outreach campaign to share traditional application information with eligible students. Each university will determine its own admissions criteria and participate in a coordinated “access and outreach campaign.”
“This new, statewide direct admissions program will make a college degree more accessible for students,” said Ginger Ostro, executive director of the Illinois Board of Higher Education. “It will motivate them to continue in their life-changing college journey.”
Alongside the direct admissions program, Governor Pritzker signed three more bills aimed at easing the path to college:
Financial Aid Application Support
Two bills, HB 3096 and HB 3097, aim to improve FAFSA completion rates by offering students more hands-on support.
- HB 3096 requires every high school to designate at least one staff member as a FAFSA point person.
- HB 3097 mandates that schools give students time during the school day to complete FAFSA forms and get help.
These requirements take effect in the 2025-26 school year. FAFSA data is critical for determining eligibility for federal, state, and institutional financial aid. Federal data shows that from 2010 to 2020, roughly 86% of first-time students at four-year institutions and 78% at two-year colleges received federal aid.
Dual Credit Program Improvements
A third bill, HB 2967, establishes new standards for Illinois’ growing dual credit programs — where high school students earn both high school and college credit from a single course.
Key provisions include:
- Dual credit teachers must have a master’s degree in their subject area or relevant graduate coursework.
- Schools and community colleges must assign staff to coordinate local dual credit agreements.
- In-state colleges and universities must be considered first when setting up new programs.
The bill also creates a state-level committee — including union reps, education officials, and others — to improve dual credit access, update program templates, and ensure consistency statewide. “These programs help students get a head start on college and a path toward career success,” said Illinois Community College Board Executive Director Brian Durham.
Chicago Transit’s $771M Fiscal Cliff May Shrink Thanks to E-Commerce Sales Tax Boost
Chicago’s looming mass transit funding crisis may not be as dire as once feared, thanks to stronger-than-expected revenue from a new e-commerce sales tax that took effect in January.
The Taxpayers’ Federation of Illinois reports that the Regional Transportation Authority (RTA) — which oversees CTA, Metra, and Pace — could receive over $200 million in additional annual revenue due to the expansion of local sales taxes to include online purchases shipped into Illinois from out-of-state retailers.
That windfall could significantly reduce the projected $771 million annual shortfall transit agencies face once federal pandemic relief funding runs out next year. “This is positive news and should make closing the fiscal cliff less daunting,” said Maurice Scholten, president of the Taxpayers’ Federation, a nonpartisan policy group.
The increase stems from a state policy change that took effect Jan. 1, applying local sales taxes to e-commerce shipments to Illinois residents. Because of the typical delay in tax collections, the additional revenue didn’t begin showing up until April. RTA’s internal projections estimate $156 million more in revenue for 2025.
The Taxpayers’ Federation forecasts a full-year increase of $225 million by 2026, assuming consumer spending remains strong. The group urged the RTA to revise its fiscal outlook and incorporate the new revenue figures as lawmakers consider long-term funding solutions.
Still, some transportation planners warn that the boost may be temporary — or at least unreliable. “While there’s some potential positive, the cost of the fiscal cliff is scheduled to grow over time,” said Erin Aleman, executive director of the Chicago Metropolitan Agency for Planning. “A lot of the sales-tax resources are difficult to implement and hard to predict. If the economy takes a turn, this may not be as fruitful as it looks now.”
Despite the funding bump, ridership remains below pre-pandemic levels, and businesses across the region still depend on reliable transit to connect workers and customers.
While the new revenue eases immediate pressure, it could complicate the politics of a broader transit funding solution. The RTA and labor unions have intensified efforts to push lawmakers for a long-term funding package.
So far, lawmakers have insisted on governance reforms at the region’s transit agencies in exchange for new money. While those changes made progress during the spring legislative session, proposals for additional funding stalled amid debate over potential new revenue sources — including surcharges on Illinois tollways and taxes on online deliveries.
Whether the recent tax revenue growth will alter the political dynamics remains to be seen. For now, the sales tax windfall offers a rare bit of good news as the region confronts a massive fiscal challenge for its transit systems.
House Appropriators Prepare to Review HUD Funding Bill as Fiscal Debates Heat Up
On July 4, President Donald Trump signed the One Big Beautiful Bill Act (OBBBA) into law. In addition to authorizing a $5 trillion extension of the federal debt ceiling, the sweeping legislation enacts much of the President’s and congressional Republicans’ policy agenda—including the extension of tax cuts and an additional $325 billion in spending for immigration enforcement and defense.
To offset the cost of these provisions, the bill includes more than $1 trillion in cuts to essential safety net programs such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP). Despite these “cost-saving” measures, the Congressional Budget Office (CBO) estimates the legislation will add over $3.9 trillion to the federal deficit over the next decade.
The Senate passed the bill on July 1 in a narrow 51-50 vote. The bill then returned to the House, where it passed on July 3 by a slim margin of 218-214.
Though HUD housing assistance is not directly affected by reconciliation rules, other essential programs supporting low-income families are. According to the CBO’s analysis of the House-passed version of the OBBBA, the bottom 10% of income earners will lose an average of $1,600 per year in assistance due to cuts to Medicaid, SNAP, and other safety net programs. These reductions could drastically undermine the ability of low-income families to meet basic needs like food, healthcare, and housing.
The legislation expands provisions related to the Low-Income Housing Tax Credit (LIHTC) and Opportunity Zone (OZ) incentives. While LIHTC is a key tool in financing affordable housing development, units built under the program are often not affordable to the lowest-income households. The expanded LIHTC provisions are projected to result in 1.22 million new affordable homes over the next decade, but the overall financial burden placed on low-income families by other parts of the bill may leave housing out of reach for those with the most acute needs.
With the reconciliation bill signed into law, Congress now shifts focus to fiscal year (FY) 2026 appropriations, with the budget year set to begin on October 1. The House Appropriations Committee is expected to start reviewing its Transportation, Housing and Urban Development (THUD) funding bill as early as July 14. However, lawmakers have yet to reach an agreement on topline spending levels for any of the 12 required appropriations bills, and the text of the THUD bill has not yet been released.
As part of negotiations to secure support for the reconciliation bill, the White House pledged to the House Freedom Caucus that it would pursue further discretionary cuts in FY26. The administration’s FY26 budget proposal includes historic reductions to HUD programs, along with proposals to restructure HUD’s rental and homelessness assistance efforts. However, Congress holds the power of the purse, and the final appropriations bill will need at least 60 votes in the Senate, requiring bipartisan cooperation.
As appropriators begin their work, advocates are urging Congress to prioritize robust funding for affordable housing and homelessness assistance. Key asks for FY26 include:
- Full funding to renew all Housing Choice Voucher (HCV) contracts, including continued support for 60,000 Emergency Housing Vouchers (EHVs)
- Increased funding for public housing operations and capital repair needs
- $4.922 billion for HUD’s Homeless Assistance Grants (HAG) program
- $20 million for the Eviction Protection Grant Program (EPGP)
- At least $1.3 billion for Tribal Housing Programs, with $150 million set aside for competitive grants targeting the greatest needs in tribal communities
As Congress works through appropriations this summer and fall, the fate of housing programs—and the broader wellbeing of millions of low-income families—hangs in the balance. With sweeping policy shifts now in place from the OBBBA, the next phase of budget negotiations will determine how deeply those changes impact the most vulnerable communities.
Federal Expansion of Housing Tax Credit Could Boost Affordable Rentals in Illinois
A lesser-known provision in the sweeping One Big Beautiful Bill Act (OBBBA) could bring significant relief to Illinois’ housing crisis. The law includes a 12% expansion of the federal Low-Income Housing Tax Credit (LIHTC) and eases financing requirements for developers, a move that housing advocates say could lead to the construction of tens of thousands of new affordable rental units across the state.
According to national accounting firm Novogradac, the changes could result in 34,700 new affordable units in Illinois and generate approximately $2 billion in tax revenue for state and local governments. “It’s a really big win and something housing advocates have been working on for several years,” said Allison Clements, executive director of the Illinois Housing Council. “It will help us increase the production of affordable rental housing at a time when we know there’s a huge demand.”
Starting in 2026, two major changes will take effect under the LIHTC program:
- The 9% Low-Income Housing Tax Credit, used for competitive housing developments, will see its funding pool expanded by 12%.
- The 4% credit, often used in conjunction with tax-exempt bond financing, will require developers to secure just 25% in private activity bonds, down from the current 50%.
These tax credits are allocated to states using a federal formula. In Illinois, the Illinois Housing Development Authority (IHDA) distributes the credits to developers. In exchange for equity investments, private investors receive the credits and assume the financial risk if a project fails—reducing the public’s burden.
IHDA reports awarding $24 million in federal tax credits to 16 developers for 2025. “The credits allow developers to reduce project costs and provide more affordable rents,” said Clements. “They’re essential to getting these units built.”
To qualify for the credits, rental properties must serve households with average incomes at or below 60% of the area median income (AMI). For example, in Chicago, that equates to:
- $50,400 for a single-person household
- $57,600 for two people
- $71,940 for a four-person household
According to the Affordable Housing Tax Credit Coalition, rents in LIHTC-financed properties are typically 45% below market rate.
A growing number of Illinoisans are struggling with housing costs. A 2024 report from the National Low Income Housing Coalition found that a full-time worker in Illinois must earn $29.81 per hour (approximately $62,000 annually) to afford a modest two-bedroom apartment at fair market rent—without spending more than 30% of their income on housing.
That challenge is compounded by a persistent shortage of affordable housing. A March report by Housing Action Illinois estimates the state is short nearly 300,000 affordable rental homes for low-income residents. “It focuses on increasing the production of housing, which we think is really key to addressing the affordability crisis,” Clements said. “Illinois has especially fallen behind other states in the number of homes being built relative to our population.”
While the federal LIHTC expansion is a major step forward, advocates argue it’s not enough on its own. They are pushing Illinois lawmakers to adopt a state-level housing tax credit to complement the federal program.
The proposed Build Illinois Homes Tax Credit (SB 62 / HB 1147) would establish a $20 million state credit, modeled after the federal LIHTC. Unlike the federal credit, which provides funding over time through investor returns, the state credit would deliver upfront financial support, helping projects get off the ground faster. The revenue impact on the state would be delayed until after projects are completed and tenants move in.
“We could take the state tax credit and pair it with these expanded federal resources to ensure projects cross the finish line,” said Clements. However, funding even a modest state credit faces political and fiscal hurdles. Illinois’ FY2026 budget allows for less than 1% growth in discretionary spending, while mandatory costs—some driven by new federal requirements—are projected to rise sharply in coming years.
Despite the LIHTC expansion, other areas of federal housing support may be in jeopardy. As Congress turns to appropriations for the next fiscal year, Republican proposals include significant cuts to core housing programs.
An analysis by Housing Action Illinois found the proposed budget would:
- Reduce staffing at the U.S. Department of Housing and Urban Development (HUD)
- Cut funding for public housing operations and capital repairs
- Scale back or eliminate Emergency Housing Vouchers (EHVs)
- Reduce support for housing assistance programs that serve low-income Americans
These cuts could undermine the progress made by the tax credit expansion, leaving many at risk of displacement or housing instability despite new unit construction.
The LIHTC expansion represents one of the most meaningful investments in affordable housing production in years, especially for a state like Illinois, where demand far exceeds supply. However, housing advocates warn that without state-level support and the protection of existing federal housing programs, the affordability crisis could deepen. “We need to keep the momentum going,” said Clements. “This is a big step, but we need more tools in the toolbox to make housing affordable for everyone.”
Governor Pritzker Joins Letter Campaign Demanding Release of Withheld Federal Education Funds, with Billions Still in Limbo
Governor Pritzker, along with 17 other Democratic governors, signed a letter last week urging the Trump administration to release nearly $7 billion in federal education grants that remain frozen.
The funds—already appropriated by Congress—were unexpectedly withheld on June 30, just one day before they were scheduled to be distributed on July 1. The delayed funding includes $241.8 million earmarked for Illinois schools and community colleges, supporting a wide range of programs such as English-language instruction, migrant education, teacher training, and student support services. The White House initially defended the freeze, claiming the grants were under review because they were allegedly advancing what it called a “radical left-wing agenda.”
“The U.S. Department of Education’s failure to distribute these funds is unacceptable,” the governors wrote in the letter. “It disrupts school operations, undermines student services, and violates the Department’s obligation to administer funding in a timely and responsible manner.”
On Friday, the White House’s Office of Management and Budget announced it had completed a review of one portion of the funds, releasing $1.3 billion for after-school programs. However, billions of dollars remain in limbo as school districts across the country try to finalize budgets for the upcoming school year.
In response, a coalition of 24 states, including Illinois and the District of Columbia, filed a lawsuit against the Trump administration on July 14, accusing federal officials of illegally withholding the grants that had already been approved by Congress. “The Trump administration is not only openly flouting the law, they are abandoning their responsibility to our students,” Pritzker said in a statement Thursday. “This unprecedented and irresponsible withholding of lawful, bipartisan funding will force cuts to critical programs and hold back the next generation from reaching their full potential.”
The impacted grants in Illinois include:
- $75.6 million for teacher training and professional development
- $30.4 million for English learners
- $56.6 million for student support services and school improvements
- $1.9 million for migrant education
- $20 million for adult education
- $3 million for adult English learners and civics education
According to the letter, schools rely heavily on these federal allocations to support students, especially those from low-income backgrounds. The sudden delay, the governors wrote, has “caused unnecessary chaos for schools” already grappling with planning challenges.
“This delay is arbitrary, unprecedented, and indefensible,” the letter continued.
The letter was addressed to Secretary of Education Linda McMahon and Office of Management and Budget Director Russell Vought. In addition to Pritzker, the signatories included the governors of Arizona, California, Colorado, Connecticut, Delaware, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, Maine, New Mexico, New York, Oregon, Rhode Island, Washington, and Wisconsin.
Business Owner Survey
The University of Chicago Booth School of Business is conducting a survey to collect information from privately held/family-owned company owners and executives about the options business owners consider for the ownership transition of their business such as:
– keeping the company and having a family member succeed as the top executive
– selling the company to the non-family management team
– sell all or a portion of the company to outside investors such as a private equity fund, family office or individual investors
This information collected in this survey is confidential and for academic research only – it will be helpful in understanding the intentions and process used by private/family owned businesses to provide insights and recommendations for assisting family/privately-owned businesses with these important issues.
Please take a few minutes to complete this brief survey: click to begin survey
Or cut and paste this link in your browser:
https://chicagobooth.az1.qualtrics.com/jfe/form/SV_beIFPtPtKGZEw74
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct