Quad Cities Lawmakers Back $56 Billion Illinois Budget as New Taxes Take Effect

The vote that shaped the budget

Illinois lawmakers passed a $55.9 billion state budget in the early morning hours of Monday, June 1. The spending plan is the largest in state history, and it includes new taxes on social media companies, digital assets, and fantasy sports.

The Quad Cities' two state legislators voted with their party to approve the measure.

Sen. Mike Halpin (D-Rock Island) and Rep. Gregg Johnson (D-Rock Island) both voted yes on the budget. The Senate approved the spending plan 37-21. The House followed with a 76-39 vote. Every Republican voted against it.

What Quad Cities residents need to know

The budget affects Illinoisans in several ways that extend beyond Springfield.

"It's allowed us to be prepared for the great reality we face today. The reality of federal cuts. The reality of chaos coming from Washington," said Sen. Elgie Sims, the Democratic budget leader from Chicago, during floor debate.

The plan includes a six-month pause on a planned 1.3-cent-per-gallon increase in the state motor fuel tax. That increase was scheduled for July 1 and is now delayed until January. The pause comes as gas prices in Chicago have jumped from an average of $2.91 per gallon to $4.82 since the Iran war began in late February, according to the Chicago Tribune.

The budget also creates a sales tax holiday for back-to-school shopping from August 7 to August 16.

New taxes on tech and betting

The revenue side of the budget relies on several new business taxes.

• Social media companies with at least 100,000 Illinois users will pay a monthly fee per user. Platforms with 100,000 to 499,999 users pay 10 cents per month per user. Platforms with 1 million or more users pay a $165,000 base fee plus 50 cents per user per month.
• Digital asset sales and fantasy sports operators will face new taxes expected to generate $65 million.
• A Targeted Advertising Services Tax — commonly known as a digital ad tax — was included, though lawmakers expect it to face legal challenges and are not counting on it for revenue in fiscal year 2027.

Those measures combined are projected to generate $500 million in new revenue, according to Capitol News Illinois.

Money moved from gas tax to general fund

Republicans criticized the budget for diverting $150 million in gas sales tax revenue to the state's general fund. That money would otherwise flow to mass transit programs.

"If you're a driver who is irritated by the high price of gas that you're paying, you should be extra irritated when you where the funds are going," said Rep. Ryan Spain (R-Peoria), according to the Chicago Tribune.

Sen. Chapin Rose (R-Mahomet) echoed that concern. He said the state should suspend the sales tax on motor fuel entirely rather than redirecting the revenue.

Lawmakers get a pay raise

The budget includes a 3.2 percent cost-of-living increase for members of the General Assembly. That raises the base salary for all 177 state lawmakers to $101,450. It is the first time Illinois part-time legislators have broken the six-figure salary mark, according to the Chicago Tribune.

Education funding meets minimums

Spending on elementary and secondary education would increase by $350 million. That meets the minimum required under the state's evidence-based funding formula adopted in 2017. The budget also restores funding for a property tax relief grant program that was suspended during the current budget year.

But the plan continues to underfund transportation grants to local school districts, including those for special education students, according to the Chicago Tribune.

SNAP backfill for federal cuts

The budget includes $70 million to help Illinoisans who lost Supplemental Nutrition Assistance Program benefits due to new federal work requirements. An estimated 120,000 residents lost benefits on May 1, potentially affecting nearly 250,000 Illinois residents, according to WVIK.

Sen. Halpin had been pushing for the SNAP backfill before the session ended. He told WVIK in May that the state cannot fully backfill all federal cuts but should prioritize food security.

"We are at the mercy of the federal government on this and other programs," Halpin said. "This is one area when it comes to food security that we should be prioritizing and making sure that folks that need this assistance don't suffer once it gets cut off."

What happens next

The budget now goes to Gov. JB Pritzker for his signature. Pritzker is seeking a rare third term and is running his November campaign around affordability.

The legislative session is now over. The next one begins in January 2027.