Springfield: Pritzker Signs $55.9 Billion Illinois Budget With New Social Media Tax, Food Aid, and Housing Funding

The Budget That Lands in Springfield

Governor JB Pritzker signed Illinois' Fiscal Year 2027 state budget on Tuesday. The $55.9 billion plan is the largest in state history. It takes effect on July 1.

The budget includes $100 million for food assistance programs. It adds $250 million for affordable housing. It raises K-12 school funding by $350 million. It also creates new taxes on social media companies, digital assets, and fantasy sports.

"In a year marked by economic uncertainty, rising costs and unprecedented fiscal challenges created by Donald Trump and the MAGA Congress, Illinois has once again demonstrated that responsible governing and balanced budgets go hand-in-hand with making life more affordable for working families and investing in the future," Pritzker said before signing the budget package at the state's West Loop offices, according to the Chicago Sun-Times.

What the Budget Does for Families

The budget pauses the scheduled 1.3-cent per gallon motor fuel tax increase for six months. The increase was set to begin July 1. It is now delayed until January 1, according to CBS News Chicago.

A back-to-school sales tax holiday runs from August 7 to August 16. Sales tax on school supplies, clothing, and other goods drops from 6.25% to 1.25% during that window, according to MyStateline.

The food assistance funding includes $70 million for one-time $400 payments to families who lost federal SNAP benefits due to recent funding cuts, according to the Chicago Sun-Times.

The New Taxes

The budget raises hundreds of millions in new revenue through several tax streams.

• Social media tax: Platforms with at least 1 million Illinois users pay a $165,000 base fee plus 50 cents per user per month. Smaller platforms pay on a progressive scale starting at 10 cents per user for those with 100,000 to 499,999 users. The state expects $200 million in revenue, according to CBS News Chicago.
• Corporate net operating loss deduction cap change: Expected to generate $300 million in new revenue, according to CBS News Chicago.
• Digital asset sales tax: A 0.2% tax on cryptocurrency and digital asset sales, effective January 1. Expected to raise $60 million, according to CBS News Chicago.
• Fantasy sports licensing tax: Licensed operators pay 15% on contest receipts. Expected to generate $5 million, according to CBS News Chicago.
• Prediction market betting tax: Starts at 1.75%, according to CBS News Chicago.
• Remote tobacco retailer tax: Requires out-of-state sellers to collect taxes on cigars, pipe tobacco, and alternative nicotine products. Expected to generate $3.8 million, according to CBS News Chicago.
• Digital advertising tax: A 10% tax on digital ad service providers with over $1 million in ad revenue. Lawmakers expect this to face legal challenges and are not counting the revenue this year, according to CBS News Chicago.

Pritzker said he feels "much more confident about the social media platform fee" surviving legal challenges, according to the Chicago Sun-Times. A similar tax in Chicago is already facing a lawsuit from Big Tech companies.

The Drafting Errors

Pritzker issued partial vetoes to fix errors in the final bill. One line item mistakenly allocated $500 billion to the Chicago Westside Branch NAACP, according to the Chicago Sun-Times. The governor also cut a youth employment program funding from $60 million to $30 million, according to CBS News Chicago.

"Majority Leader Robyn Gabel and Senator Elgie Sims, Jr., the House and Senate sponsors, respectively, of the bill have identified a number of individual appropriation lines included in the enrolled bill sent to me for consideration that either contain errors or are duplicative of other appropriation lines already contained in the bill," Pritzker said in his veto message, according to CBS News Chicago.

The Opposition

Republicans in the Illinois General Assembly voted against the budget. All Republicans opposed it, with only a few dissenting Democrats, according to CBS News Chicago.

"Illinois families deserve real solutions to the rising cost of living, not nearly $56 billion in spending, $800 million in new taxes, and the same budget gimmicks that have failed taxpayers for years," House Minority Leader Tony McCombie, R-Savanna, said in a statement, according to the Chicago Sun-Times.

"It does nothing to address the structural deficits that directly result in Illinois being a bottom-six state in both economic growth and job opportunities under Gov. Pritzker," Senate Minority Leader John Curran, R-Downers Grove, said, according to the Chicago Sun-Times.

Why It Matters

Pritzker is running for a third term as governor. The budget framing puts affordability at the center of his campaign message. Lt. Gov. Juliana Stratton, who is running for U.S. Senate, echoed that theme.

"We have never lost sight of your family's budget," Stratton said. "From groceries to gas to health care, everything is more expensive right now, and families in every corner of our state are feeling the squeeze and letting us know it's getting harder and harder to make ends meet," according to CBS News Chicago.

The budget limits discretionary spending growth to less than 0.5% year over year. It fully funds Illinois' required pension contributions, according to MyStateline.

Education funding reaches $9.3 billion annually for K-12 schools. Higher education funding through the Monetary Award Program stays at $721.6 million, according to MyStateline.

Healthcare support includes $5 million for medical debt relief and about $110 million in a Medicaid package aimed at hospital support and system oversight, according to MyStateline.