Pritzker to show Democrats how he thinks big about taxes, budgets, deficits
Gov. J.B. Pritzker’s record $53.1 billion state budget imposes $1.1 billion in new taxes on Illinoisans and still manages to underfund public pensions. He’s boosted state spending by $15 billion in six years. Housing, jobs and population are all suffering.
Illinois Gov. J.B. Pritzker has some big things to tout when the Democratic National Convention comes to the city of big shoulders: big taxes, bigger budgets and the biggest pension deficit in the nation.
His state is also suffering big losses as Illinoisans move out.
Pritzker just set a record for signing the largest budget in state history for fiscal year 2025. It added $1.1 billion in new taxes to spend a record $53.1 billion – $15 billion higher than when Pritzker took office.
Illinois’ newest budget continues the state’s long-standing traditions of underfunding pension payments, adding billions in new spending and hiking taxes on residents to make up the difference.
Among the new taxes Illinoisans will find in Pritzker’s budget are a lower cap on net operating losses for businesses, a massive spike in Illinois’ sports gambling tax and lower fees for businesses collecting sales taxes for government.
As far as new state spending, Illinois taxpayers will be on the hook for about $2.7 billion more in expenditures than last fiscal year.
That includes nearly $182 million more for migrants, $50 million more for homelessness, $12 million more for higher education, $353 million more for pensions and an additional $350 million for K-12 education.
The investment in K-12 education from the General Assembly was approved just months after the same legislators failed to extend Illinois’ largest school-choice program – ending financial assistance for 9,600 low-income students statewide.
In total, 22% of the state budget will go just to pay for pensions. And yet, Illinois’ most expensive budget on record will still manage to underfund needed pension contributions by $4.51 billion.
State lawmakers’ continued penchant for overspending and underfunding pensions has made Illinois one of the most expensive states in which to live and do business. There have been 548,916 Illinoisans during the past decade who called it quits and headed to lower-tax states and better housing and job opportunities.
Illinoisans pay the highest combined state and local tax rates in the U.S., the second-highest property tax rate and have the third-worst unemployment rate in the nation.
State business owners have also seen corporate tax rates and sales tax rates increase since Pritzker took office. Illinois’ business tax climate ranking dropped from 29th in 2018 before Pritzker became governor to 37th in 2024.
The Illinois Policy Institute’s Lincoln Poll found 51% of the voters surveyed would leave the state if they could, with most citing high taxes as the reason. And among the Illinoisans who left the state, 97% moved to lower-tax states, according to the most recent data.
This could help explain why Illinois has seen 10 consecutive years of population decline as its neighboring Midwestern states experience growth. The most recent census data shows 3-in-4 Illinois communities lost population last year.
Instead of maxing out the budget and adding billions in new spending, Illinois’ budget should have focused on increasing reserves to build the foundation for future tax relief. One way to do that is with constitutional pension reform so Illinois can control the future growth of its public pension liabilities.
A pension reform plan such as one originally developed by the Illinois Policy Institute – based loosely on bipartisan 2013 reforms – would help to eliminate state and local unfunded pension liabilities and achieve retirement security for government pensioners without taking away current benefits.
Instead of always thinking about bigger government budgets, taxes and deficits, Pritzker should be thinking of how to show fellow Democrats a bigger state population and economy.