Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
The governor has signed the new state budget which will begin on July 1. More on what is included in the budget can be found below. Additionally, it was announced that the fall veto session will take place in the month of October. It’s scheduled for October 14 through 16 and October 28 through 30.
Last call for our Legislative Update breakfast scheduled for Wednesday, June 25 from 7:45 to 9:00 AM at Harrah’s Joliet. State Senators Ventura and Loughran Cappel will join State Representatives Avelar, Walsh Jr., and Benton to talk about the state budget and other items of note. Here is the link to join us: https://members.jolietchamber.com/events/details/2025-member-breakfast-june-25-legislative-update-7692
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Governor Pritzker Signs Record $55.1B State Budget, Touts Fiscal Balance Amid Federal Uncertainty
Governor Pritzker on Monday signed Illinois’ $55.1 billion state budget into law—marking the largest spending plan in the state’s history. The new budget, which takes effect July 1, is backed by $55.3 billion in projected revenue and includes over $700 million in new taxes and more than $500 million in one-time revenues.
At a signing ceremony in Chicago, Pritzker contrasted Illinois’ fiscal plan with what he described as reckless federal budgeting under former President Donald Trump. “While the Trump administration goes on Fox News lying about being fiscally responsible, Illinois is showing a better way: balancing the budget while maintaining the programs people rely on,” he said.
The FY2026 budget passed narrowly before the May 31 deadline, with all Republicans opposed and only a few Democrats breaking ranks. Lawmakers were forced to close a projected $3 billion shortfall while navigating federal funding uncertainty and concerns over growing program costs.
Democrats hailed the plan as responsible and forward-looking. “Democrats faced the challenges and uncertainty head-on, and the result is a budget that is truly balanced with no gimmicks,” said House Speaker Chris Welch (D-Hillside).
Republicans disagreed, pointing to fund sweeps and deferred transfers that free up hundreds of millions in temporary cash. “This approach sets Illinois up for failure by FY27 and continues a pattern of short-term thinking,” said House Minority Leader Tony McCombie (R-Savanna).
Senate Minority Leader John Curran (R-Downers Grove) criticized the reliance on nearly $1 billion in new taxes, calling it a burden on residents and businesses.
New Revenue Sources: Targeted Tax Hikes, Not Broad Increases
The budget avoids across-the-board tax hikes, with Pritzker vowing to veto any proposal containing broad-based increases in personal income, corporate income, or sales taxes. Instead, new revenue is driven by targeted tax changes:
- $336M from corporate tax changes affecting out-of-state businesses to “level the playing field.”
- $50M from higher taxes on tobacco and vape products (now taxed at 45%).
- $49M from a telecom tax hike, raising the rate from 7% to 8.65% to support the statewide 988 mental health hotline.
- $36M from new sports betting fees, with companies like FanDuel and DraftKings passing those costs to consumers.
- $10M from extending the hotel tax to short-term rentals like Vrbo (Airbnb already complies).
- $228M from two tax amnesty programs, encouraging payment of overdue taxes.
Budget Maneuvers: One-Time Revenue and Fund Sweeps
The FY26 budget also includes $544 million in one-time revenue from fund sweeps and delayed transfers:
- A $45M pause in contributions to the state’s rainy day fund (which still expects to grow from interest and other sources).
- A $171M delay in transferring motor fuel sales tax revenue to the road fund.
- Creation of a $100M BRIDGE fund to offset potential delays in federal funding, supported by sweeping 57 different funds.
While these measures offer temporary relief, critics argue they are not sustainable long-term solutions.
Human Services: Cuts and Targeted Increases
A key cut in the new budget is the elimination of the Health Benefits for Immigrant Adults (HBIA) program, which provided Medicaid-like coverage for low-income noncitizens aged 42–64. The program’s costs had ballooned to over $1.6 billion since inception. Its elimination is projected to save $330 million.
However, lawmakers preserved the Health Benefits for Immigrant Seniors (HBIS) program ($110 million) and expanded funding elsewhere:
- $40M for Federally Qualified Health Centers to help fill coverage gaps.
- $18M for five safety-net hospitals and $100M for 12 additional hospitals in the Medicaid managed care system.
- $60M for SNAP administrative costs, a $20M increase amid federal cost-sharing proposals.
- $263.7M for HOME Illinois, the state’s homelessness initiative—a $14.6M decrease from FY25.
- $25M Prescription Drug Affordability Fund, to aid small pharmacies.
- $15M Medical Debt Relief Pilot Program.
- $4M for DCFS, funding 100 new staff hires.
- 80-cent hourly wage increases for direct service professionals, though flat overall funding means job cuts for over 300 positions.
- Child tax credit doubling from 20% to 40% of the Earned Income Tax Credit.
Education: Mixed Funding Picture
The budget funds the state’s evidence-based K-12 formula with an additional $307 million, though it omits an expected $43 million in property tax relief support.
For higher education, operational funding increases just 1%, below the 3% Pritzker proposed. Lawmakers say they’re prepared to boost this later if federal aid is cut.
Additional education items include:
- $10M increase for Monetary Award Program (MAP) grants for low-income college students.
- $8M for minority teacher scholarships.
- $2.9M for the Common App initiative, streamlining college applications.
- $212M for Smart Start early childhood education.
- $21.7M to fund the new Department of Early Childhood.
Infrastructure and Other Spending
Major infrastructure and operational allocations include:
- $6.2B for IDOT construction, including $4.5B for roads and bridges.
- $500M for Surplus to Success, a redevelopment program for idle state properties.
- $17.9M for DFPR to implement a new professional licensing system.
- $40M for immigrant Welcoming Centers.
- $75M for a new Tier 2 pension reserve fund, to avoid violating federal safe harbor laws.
Congress Braces for Clash Over Senate GOP Changes to Trump Agenda Bill
President Trump’s second-term legislative agenda is facing a significant overhaul in the Senate, setting up a potential showdown between House and Senate Republicans. A new proposal from the Senate Finance Committee, unveiled during a private GOP briefing Monday evening, would raise the federal debt ceiling to $5 trillion—a full $1 trillion more than the House’s $4 trillion plan. The higher borrowing limit is likely to draw criticism from fiscal conservatives and could jeopardize House passage.
The Senate plan also makes several controversial policy shifts, including:
- Medicaid Reform:
The bill would lower the allowable health care provider tax rate in Medicaid expansion states from 6% to 3.5% by 2031. While critics call the tax mechanism a form of “money laundering,” the reduction could leave major funding gaps in state Medicaid budgets—particularly in red states—and force cuts to hospitals or other services.
In addition, non-expansion states would be barred from raising their provider tax rates to draw more federal funding, further limiting state options. - Eligibility Tightening:
Senate Republicans also propose stricter Medicaid eligibility requirements, going beyond what the House passed. While the White House has expressed support for curbing potential program “abuse,” the move may raise concerns over Trump’s pledge to protect federal health benefits. - Tax Changes:
The Senate bill would make permanent the 2017 corporate tax cuts enacted under Trump and phase out renewable energy tax credits passed during the Biden administration. It also includes Trump’s promise to exempt workers’ tips from federal taxation. - SALT Deduction Cap Dispute:
The proposal maintains the $10,000 cap on state and local tax (SALT) deductions, infuriating moderate House Republicans from high-tax states. Those lawmakers had previously struck a deal with House leadership to raise the cap to $40,000, and now face a reversal that could put their support in doubt.
With the House and Senate now on diverging paths—and core issues like taxes, Medicaid, and federal spending at stake—Republicans are headed for a legislative clash that could threaten the unity needed to pass a final bill.
Illinois Could Lose $22.2 Billion in Health Care Funding Under GOP Budget Bill
Illinois is poised to lose $22.2 billion in health care funding over the next decade if the U.S. Senate passes the GOP-backed “One Big Beautiful Bill Act”, according to a new analysis by the Urban Institute and the Robert Wood Johnson Foundation. The bill, already passed by the House, would dramatically reshape Medicaid and Affordable Care Act (ACA) subsidies nationwide, with significant consequences for hospitals, providers, and patients.
The proposed cuts would hit nearly every part of Illinois’ health care system:
- Hospitals: $9.2 billion in lost federal support
- Physicians: $2.2 billion in cuts
- Prescription drug payments: $5.2 billion reduction
- Other categories: $5.7 billion in additional losses
Illinois is one of nine states projected to lose more than $20 billion under the plan, making it one of the hardest-hit nationwide. Indiana, by comparison, would face an even greater loss—$30.9 billion, including $12.7 billion for hospitals alone—due to higher care utilization and prices, analysts say.
According to a separate analysis by the Kaiser Family Foundation, the changes would result in an estimated 500,000 more uninsured Illinoisans over the next 10 years—a 4-point increase in the state’s uninsured rate. Of those, 440,000 would lose coverage due to Medicaid cuts, and another 57,000 due to changes to ACA marketplace subsidies.
The drop in coverage would lead to a sharp rise in uncompensated care, which hospitals must provide to those who cannot pay. The analysis projects:
- $6.2 billion increase in uncompensated care costs in Illinois
- $7.4 billion increase in Indiana
- $63 billion nationwide
Urban Institute senior policy adviser Katherine Hempstead warned that these shifts would undo years of progress in expanding health coverage. “We’ve been on a slow, steady march to reduce uninsured rates for several years now. Now we’re pivoting and taking steps backwards,” she said.
The implications extend far beyond Medicaid enrollees. With revenue shrinking and uncompensated care rising, hospitals—especially rural or financially vulnerable ones—may be forced to cut staff, reduce hours, or eliminate services, leading to a decline in access to care for everyone, Hempstead said. “This isn’t just about people losing Medicaid,” she added. “It’s about the spillover effects on the entire health care system.”
Employers could also see higher insurance premiums as costs shift to private payers to compensate for lost federal funding. Job losses in the health care sector would ripple through local economies. In a June 11 statement, Rick Pollack, president and CEO of the American Hospital Association, echoed these concerns: “These cuts will strain already overburdened hospitals and emergency departments as they become the family doctor for millions of newly uninsured Americans… They would set off a damaging ripple effect of job and economic losses, and these reductions will simply become an additional ‘hidden tax’ on other purchasers of health care services.”
Urban Institute senior fellow Fredric Blavin said the findings should serve as a wake-up call for state and local officials. “This analysis can help policymakers consider the potential adverse effects on coverage, access, and the financial vulnerability of providers in their state,” he said.
As the Senate prepares to debate the bill, Illinois lawmakers and health care leaders are bracing for what could be one of the largest federal health care funding reductions in the state’s history. The fate of millions of patients—and the stability of the entire health care system—may hang in the balance.
Chicago Transit Agencies Brace for ‘Doomsday’ Budget Cuts Amid Funding Crisis
Transit agencies across northern Illinois have begun preparing for a worst-case funding scenario, initiating formal plans for deep service cuts and potential layoffs as they face a looming $771 million annual budget shortfall starting in 2026.
At the center of the crisis: the expiration of federal COVID-19 relief funds, stagnant ridership levels that remain below pre-pandemic norms, and the Illinois General Assembly’s failure to pass transit funding reform before the May 31 legislative deadline.
At two meetings recently, officials from the Regional Transportation Authority (RTA) and Chicago Transit Authority (CTA) issued urgent warnings. “We have told everyone they needed to act by May 31 or else,” said RTA board member Tom Kotarac. “We are in the ‘or else’ phase.”
RTA Executive Director Leanne Redden echoed the sentiment, saying even if lawmakers act in the fall, the damage is already underway. “The negative impacts are here, and now we’re going to have to work together to mitigate the worst of them while the legislature continues to do their work.”
Last Thursday, the RTA directed its three service boards — CTA, Metra, and Pace — to prepare two parallel 2026 budgets:
- One assuming lawmakers fill the funding gap.
- One assuming no new funding, which would require a 20% reduction in expected operating budgets.
RTA will also raise fares in 2026 and seek administrative cost reductions in 2025. An ad hoc task force will be formed to manage potential service cuts and guide the unusual budget process.
Under Illinois law, the RTA must tell transit service boards how much revenue will be available for the following year by September 15. Boards then build and submit budgets based on those numbers. Preliminary funding estimates are typically released in July. That September deadline comes weeks before the General Assembly’s fall veto session, leaving little time for lawmakers to take meaningful action before transit agencies are legally required to submit balanced budgets.
Even if the legislature acts in October, new funding may not reach transit agencies until mid-2026, due to policy implementation delays or deferred effective dates.
“We cannot operate on assumptions and pledges of good faith,” said RTA government affairs director Rob Nash. “The clock has run out.” Nash warned that without timely action, financial and operational costs to the system and to riders are inevitable. “We are likely to face a challenge in the first part of 2026 no matter what the General Assembly does at this point.”
Despite the crisis, the CTA will continue to operate under its 2025 service plan. However, public hearings will be held throughout the summer and fall to consider the real-world consequences of the fiscal cliff. House Speaker Emanuel “Chris” Welch recently told Capitol News Illinois there is still “time” to address the issue. But transit leaders are urging lawmakers to act swiftly — warning that the damage has already begun and could worsen quickly without a long-term funding solution.
ComEd Grant to 501c3 Organizations
ComEd is making the unusual move of providing relief to some Illinois residents and businesses that could be especially hard-hit by the expected increase in energy costs this summer.
A one-time grant: “Our parent company, Exelon, decided we should do a one-time grant for our customers who may have difficulty paying their bills,” ComEd CEO Gil Quiniones said in an interview. “This is in response to the financial pressures on many families and nonprofits in our community.” Quiniones says a little over $10 million will be used to help low- to moderate-income customers and nonprofits that will see their bills go up. ComEd is specifically hoping to help those with past-due balances.
The price hikes are a result of an annual estimation by the PJM regional transmission organization that manages the power grid for Illinois and 12 other states. PJM has estimated that energy needs will go up at a time when power plants (the coal-fired ones) are closing. Add to that the increase in data centers and what might happen in a changing political climate and higher prices are inevitable, according to ComEd.
“Every year they do this auction where they get all the demand forecasts from utilities like us, and they aggregate that and then determine the year ahead,” Quiniones explained, adding the extra cost will be passed on to power customers “without any profit” to ComEd. “We are a delivery utility. We don’t operate the power plants.”
Starting in July, low-income ComEd customers and charitable organizations will be able to apply for a portion of the $10 million in bill relief and energy efficiency by applying through one of ComEd’s community partners: Neighborhood Housing Services or The Salvation Army. Here’s how to apply.
$10,000 small business grants from Verizon!
Applications open until June 30, 2025
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Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct