“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
The Illinois House returned to Springfield yesterday after a week away with the Senate scheduled to be back on the 14th. The House deadline to move bills over to the Senate is April 17, so there should be lots of action this week and next. The Senate has the same deadline of 4/17 so they’ll really push things next week. The legislature’s scheduled May 31 adjournment still remains.
Many state agencies are presenting their budget proposals, while other legislative committees are holding subject matter hearings on a variety of bills that could get lumped into bigger packages later this spring.
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Illinois Posts Strong March Revenue Gains as Budget Season Nears
Illinois saw a solid boost in revenues in March, continuing a steady upward trend for the current fiscal year and offering a positive signal as lawmakers head into the final stretch of budget negotiations.
According to the Commission on Government Forecasting and Accountability (COGFA), March revenues grew by $233 million — a 4.8% increase compared to the same month last year. With three quarters of fiscal year 2026 complete, total revenues are now up $1.6 billion, or 4.2%.
The timing is significant. April — typically the state’s largest revenue month due to the April 15 tax deadline — is expected to play a decisive role in shaping the final weeks of budget talks in May. COGFA described the March figures as “encouraging,” noting they align with the agency’s updated revenue projections released earlier this spring.
While March benefited from one additional receipting day compared to last year, revenues still rose 1.2% on a comparable basis. Growth was largely driven by personal income taxes, which increased by $309 million year-over year. Sales tax revenues also posted gains, rising 2.9% or $27 million.
Not all categories saw growth. Corporate income tax revenues declined 3.4% in March and are down 6.2% for the fiscal year. COGFA attributed part of that decline to federal corporate tax changes that continue to weigh on state collections, despite Illinois lawmakers’ efforts to separate state tax policy from federal law.
Federal revenue — often volatile on a month-to-month basis — increased for the second straight month after three consecutive declines, though it remains down 5.2% for the year overall.
Looking ahead, COGFA now estimates total state revenues will come in $686 million higher than originally projected when the budget was passed last May, a modest 1.2% increase. That upward revision is largely tied to stronger-than-expected personal income tax collections and gains in several smaller revenue streams.
Sales taxes have been a particularly bright spot. Collections are up $363 million, or 4.2% year-to-date — outperforming the 2.7% growth assumption built into the current budget. COGFA credited the increase to a mix of elevated prices and continued consumer spending power.
The next key data point will arrive in early May, when April revenue figures are released. That report will serve as the final comprehensive look at the state’s fiscal position before lawmakers face a May 31 deadline to approve the fiscal year 2027 budget.
Illinois House Speaker Shares Remaining Session Expectations
With the primary election behind them and lawmakers back in Springfield, House Speaker Emanuel “Chris” Welch is working to reset expectations for the final stretch of session, warning that a tightening fiscal outlook will limit new spending.
“Members are rested and ready to get back to work,” Welch said, noting the immediate priority is meeting the April 17 third-reading deadline and advancing legislation “across the finish line.”
But beyond bill passage, Welch made clear the bigger challenge is the state’s worsening budget picture. Since Gov. JB Pritzker delivered his budget address in February, the outlook has deteriorated, leaving less room for new initiatives.
“Things have not gotten better since the governor’s budget address — that number hasn’t gotten better, it’s gotten worse,” Welch said, referencing a projected $2.2 billion gap he attributes to federal actions.
Uncertainty from Washington continues to loom large. Potential federal cuts to Medicaid, food assistance and other programs are complicating budget planning for Democrats, while Republicans argue the state’s financial strain stems from overspending.
Against that backdrop, Welch said his caucus understands the constraints. “Our members have realistic expectations. They know it’s a tough budget year,” he said — a signal that major new spending proposals are unlikely.
Instead, Democratic leadership is emphasizing cost-of-living concerns, focusing on policies aimed at lowering everyday expenses like “gas, groceries, rent, [and] mortgages,” Welch said. He also highlighted legislation he is sponsoring that would restrict the placement of new federal immigration detention centers within 1,500 feet of schools, daycares, homes, parks and religious institutions.
Tax debate
Welch voiced support for a potential millionaire’s tax, arguing that “those who can pay more should pay more,” and pointing to roughly $4 billion in possible revenue. However, he stopped short of making it a central component of this year’s budget, describing it instead as part of an ongoing conversation — including how any new revenue might be used, such as for property tax relief or pensions.
The issue is gaining traction in the legislature. Lawmakers face a May 3 deadline to approve a constitutional amendment for the November ballot. A proposal from state Rep. Natalie Manley, D-Joliet, to impose a 3% tax on income over $1 million is scheduled for a House Revenue Committee hearing this week. Former Gov. Pat Quinn is also advocating for a similar measure, with his plan directing all revenue toward property tax relief, while Manley’s would split funds between relief and K-12 education. Major business groups, including the Illinois Manufacturers’ Association and Illinois Chamber of Commerce, oppose the idea.
Limits within the caucus
Welch also pointed to internal political realities, particularly when it comes to legislation targeting Chicago policies. Any bill requires 60 Democratic votes to reach the floor, a threshold that can be difficult to meet on divisive issues.
“A strong Chicago makes for a strong Illinois,” Welch said, signaling limited momentum for proposals aimed at blocking the city’s potential “head tax” on businesses or halting the phaseout of tipped wages.
Policy contrasts and pending decisions
On social policy, Welch drew a clear contrast with federal trends, reaffirming Illinois’ support for diversity, equity and inclusion initiatives. He cited ongoing corporate board reporting requirements as evidence that those policies remain in place.
Meanwhile, the long-running debate over a new Chicago Bears stadium remains unresolved. Welch said negotiations — led by Speaker Pro Tempore Kam Buckner — are ongoing, but any proposal will face scrutiny from a caucus wary of large financial commitments in a tight budget year.
The timeline may be accelerating. According to ESPN’s Adam Schefter, the Bears are expected to decide on a stadium location within weeks, with concerns the team could look to Indiana if Illinois does not act soon.
As the legislative session enters its final phase, Welch is signaling a disciplined approach shaped by fiscal constraints. “We’ll put together another balanced, compassionate and responsible budget,” he said. “But it’s going to take teamwork.”
New Study Revives Case for Illinois Millionaires Tax as Deadline Nears
With a key deadline fast approaching, a new study is adding fuel to the ongoing debate over whether Illinois should adopt a “millionaires’ tax” — and giving lawmakers fresh data as they weigh whether to put the question before voters.
Under the Illinois Constitution, any binding statewide referendum must be approved at least six months before a general election. That sets a May 3 deadline for lawmakers to act if they want the issue on the 2026 ballot — now less than a month away.
The proposal gaining attention would impose a 3% surcharge on income over $1 million. It closely mirrors a nonbinding advisory question on the 2024 ballot that received 61% voter support. Supporters say the revenue could be used for property tax relief, K-12 education funding, or a combination of both.
The idea has backing from prominent Democrats, including House Speaker Emanuel “Chris” Welch, who has said he is working to build support in the legislature. Former Gov. Pat Quinn is also advocating for the measure. To make the ballot, the proposal would need a supermajority vote in both chambers of the General Assembly, though it would not require the governor’s signature.
Lawmakers have been cautious about revisiting income tax changes since voters rejected a graduated income tax amendment in 2020. In the years that followed, stronger-than-expected revenues — driven in part by federal stimulus and post-pandemic economic growth — eased budget pressures.
But the fiscal environment is changing. Federal funding cuts and tax policy shifts are expected to put pressure on state finances, while high property taxes remain a persistent concern across Illinois. Against that backdrop, a millionaire’s tax is increasingly being framed as a way to generate new revenue while targeting higher earners.
Versions of the tax already exist in states like California and New Jersey and have more recently been adopted in Massachusetts and Washington.
A new report from the Illinois Economic Policy Institute and the University of Illinois at Urbana-Champaign outlines the potential impact of such a tax in Illinois.
The study estimates a 3% surcharge on income over $1 million would generate $3.8 billion in its first full year and grow to $4.2 billion annually by 2030 — figures the authors describe as conservative.
Researchers examined three main ways the state could use the revenue:
- Property tax relief: One option would provide about $1,500 in rebates to roughly 3 million homeowners with homestead exemptions. By 2030, that could reduce property tax bills by more than 20% for those households, though Illinois would still rank among the higher-tax states nationally.
- Increased school funding: Another approach would direct the funds toward fully funding the state’s Evidence-Based Funding (EBF) formula for K-12 education. At current funding levels, adequacy isn’t expected until 2039. With the new revenue, that timeline could accelerate to 2028, with additional funds potentially available for property tax relief.
- Hybrid approach: A third option combines an eight-year school property tax freeze with increased education funding. This plan would gradually boost EBF contributions and cover inflationary costs, leading to an estimated 7% reduction in property tax bills by 2030.
The report also found that similar taxes in other states have not significantly slowed economic growth or triggered large-scale migration among wealthy residents. In Illinois, the added revenue could make the overall tax system less regressive, the authors argue.
High property taxes continue to be one of the most widely cited concerns among Illinois residents. While property taxes are set locally, they are closely tied to state funding for education, which makes up more than half of a typical property tax bill.
Gov. JB Pritzker recently acknowledged the burden, noting that some school districts have continued raising property taxes even as state funding has increased. A millionaire’s tax, he said, “could” help ease that pressure — but would not solve the problem on its own.
Pritzker, who led the push for the failed 2020 “fair tax” amendment, has indicated that another income tax overhaul is not a top priority this year.
Political dynamics may differ from 2020. The state’s wealthiest opponent of that effort, Ken Griffin, has since moved to Florida, and it’s unclear whether a similar opposition campaign would emerge. At the same time, Democrats may see a more favorable political climate heading into the next election cycle.
Still, significant hurdles remain. Some policymakers prefer broader structural tax changes over a narrowly defined surcharge, while others remain wary after the previous failed attempt.
Whether lawmakers ultimately move forward remains an open question. But with ongoing budget pressures and continued frustration over property taxes, the millionaires tax debate appears far from over — and may be gaining new momentum.
Governor Pritzker Weighs Gas Tax Freeze as Fuel Prices Climb
With gas prices on the rise, Illinois Governor JB Pritzker is exploring options to ease the burden on drivers — including the possibility of freezing the state’s motor fuel tax.
Speaking to reporters in late March, Pritzker said his administration is looking broadly at ways to reduce costs for residents, though he acknowledged the limits of state control over global energy markets. “We’re obviously looking for all the ways we can do that,” Pritzker said. “One of the challenges is we don’t have control of a reserve of oil that we could release to lower the cost of oil.”
The idea of providing relief at the pump is gaining traction beyond Illinois. President Donald Trump and members of Congress have also discussed potential measures, while several states are considering temporary gas tax suspensions. Georgia has already enacted one.
Fuel costs have been creeping higher in recent weeks. In the Midwest, the average price of regular gasoline reached $3.71 per gallon on March 30, up from $3.68 the week prior, according to the U.S. Energy Information Administration. Nationally, prices were even higher, with GasBuddy reporting an average of $4.07 per gallon as of April 1.
Those increases are putting additional pressure on policymakers to respond, particularly as inflation continues to affect household budgets.
While a gas tax freeze could offer short-term relief, Pritzker noted it comes with tradeoffs. Illinois relies on motor fuel tax revenue to fund transportation infrastructure projects, including roads, bridges and ports that are critical to the state’s economy.
“Remember, we’re also trying to build roads,” Pritzker said. “Especially for the agricultural community, it’s been very important for us to build roads and bridges… so it’s a challenging endeavor because of our infrastructure needs.”
Pritzker previously delayed a scheduled gas tax increase in 2022, a move he pointed to as an example of how the state has stepped in before to help offset rising costs.
Still, he emphasized that fuel is just one part of a broader affordability challenge. “There are a number of ways that input costs are rising aside from just oil and gas that we’re trying to bring down in the state,” he said.
Illinois’ motor fuel tax, first enacted in 1977, is technically levied on fuel distributors rather than directly on consumers, though the cost is typically passed along at the pump.
The current rate stands at 48.3 cents per gallon for gasoline and 55.8 cents per gallon for diesel fuel. Additional taxes apply to alternative fuels such as liquefied petroleum gas, liquefied natural gas and compressed natural gas.
No decision has been made on whether Illinois will move forward with a tax freeze. But as prices continue to fluctuate and budget pressures persist, the issue is likely to remain part of the broader conversation around affordability and state spending priorities.
Federal-State Clash Escalates Over Regulation of Prediction Markets
A growing legal battle between federal regulators and state governments is setting the stage for a major showdown over who controls prediction markets — platforms that allow users to wager on real-world events like elections and sports.
At the center of the dispute is the question of authority. The Commodity Futures Trading Commission (CFTC) argues it has exclusive jurisdiction over these markets under federal law, while several states have moved to block or restrict their operation, citing concerns that they resemble unregulated gambling.
The CFTC has now filed lawsuits challenging enforcement actions taken by Arizona, Connecticut and Illinois against Kalshi and other federally regulated platforms. The agency contends that states are overstepping by attempting to ban or penalize trading in event contracts that are permitted under federal law.
“Congress long ago decided that rules for commodity trading should be the same nationwide, not different from state to state,” the agency said, emphasizing the need for a uniform regulatory framework.
CFTC Chairman Michael Selig said the agency will continue to defend its authority and protect market participants from what he described as “overzealous state regulators.” He warned that allowing states to regulate independently could create a fragmented system, increasing the risk of fraud and weakening consumer protection.
States, however, have taken a different view — moving to curb or block prediction markets within their borders.
In March, Arizona filed criminal charges against Kalshi, alleging the company operated an illegal gambling business without a state license and engaged in election wagering. Nevada has also moved to block prediction markets, while other states are exploring regulatory action.
Arizona Attorney General Kris Mayes has previously argued that companies cannot pick and choose which state laws to follow. The Illinois Attorney General’s office said it is currently reviewing the federal complaint, while Connecticut officials have also been drawn into the dispute.
The U.S. Department of Justice has joined the fight, asking a federal judge to clarify whether the CFTC holds exclusive authority over event-based trading.
“Unless restrained and enjoined by the Court, defendants are likely to continue their attempts to subvert federal law,” DOJ attorney Tiberius Davis wrote in court filings.
The outcome could have sweeping implications for the future of prediction markets nationwide, particularly as they grow in popularity and begin to resemble traditional sports betting.
Prediction markets operate under federal “event contract” rules first recognized in 1992 and expanded after the 2008 financial crisis. These platforms allow users to take positions on outcomes — such as election results or game winners — by effectively betting against other users.
Critics argue the products are nearly indistinguishable from sportsbooks, which are regulated at the state level and subject to state taxes.
That tension was highlighted in a recent New Jersey appellate court ruling, where the majority indicated prediction markets likely fall under federal jurisdiction. However, a dissenting judge argued they are “virtually indistinguishable from sportsbooks.”
Legal trends have been mixed. According to sports gambling attorney Daniel Wallach, states prevailed in 14 of 16 preliminary rulings against prediction market operators before the New Jersey decision.
As lawsuits move forward, the courts are expected to play a major role in defining the boundary between federal and state authority.
In the meantime, companies remain caught in the middle of an evolving legal landscape, as regulators at both levels of government fight for control over a rapidly expanding industry.
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct