• Facebook
  • Twitter
  • LinkedIn
  • Home
  • Contact
  • Blog
Children's Advocates for Change
  • About Us
    • Our Game Plan
    • Board of Directors
    • Staff
    • Fellows
  • Policy & Legislation
  • News & Resources
    • Fact Sheets and Publications
    • Data and Maps
    • Newsletters
    • Media
    • Press Releases
    • Blog
  • Gallery
  • Donate
  • Search
  • Menu Menu
Company News

CAFC’s Review of the Governor’s Proposed Fiscal Year 2026 Illinois State Budget

Illinois Governor J.B. Pritzker has proposed a state budget for the next fiscal year that holds the line on income and corporate taxes, increases investments in K-12 public schools and higher education, makes a full pension contribution, cuts a state health insurance program that served undocumented immigrants ages 42-64, and provides a cautionary tale of what could be ahead in 2026.

The budget outlines revenues and expenditures for Fiscal Year 2026 (FY26) that begins on July 1st of this year. While not rosy, the projected $55.5 billion in general funds[1] and the $55.2 billion in expenditures is much better than the $3.2 billion deficit the Governor’s Office of Management and Budget projected in November.

Revenue

The November estimate for FY26 individual income tax revenue was $27.8 billion. It is now pegged at $28.7 billion. Corporate income tax revenue is slightly below the November projection, and sales tax revenue is listed as an increase of $326 million from the November projection.

The Governor’s proposal also calls for raising another $468 million by:

  • Offering a delinquent tax payment program where taxpayers with an outstanding tax payment from prior years can make the payment without penalty or interest

    General Funds Revenue $55.5 billion
    Image source: Office of Management and Budget

    ($198 million in anticipated revenue).

  • Changing the tax rate applied to revenue from casino table games, which is now more beneficial to larger casinos ($100 million in anticipated revenue)
  • Pausing a shift of state sales tax revenue from motor fuel purchases to the Road Fund ($171 million in anticipated revenue)

Yet, overlaying the revenue projects is the overall uncertainty of what the federal government will do in the next several months.

  • On February 1st, President Donald Trump imposed tariffs of 25% on goods from Mexico and Canada and a 10% on goods from China. He then suspended for 30 days the tariffs on Mexico and Canada.
  • On February 10th, the President announced a 25% tariff on steel and aluminum. These tariffs are scheduled to become effective March 12th.
  • The President has also stated his intentions to impose or increase U.S. tariffs to match the tax rates that other countries charge on U.S. imports[2].

The state’s budget office used a S&P Global economic forecast in its revenue projections, which took into account some tariff activity but not all of what is noted above. Depending on whether U.S. consumers switch to similar domestic products, if such items are produced domestically, it could impact consumer spending as well as business production. The following statement is in the proposed budget:

The Trump Administration’s proposed tariffs on exports from Illinois’ top trading partners like Canada and Mexico will have devastating impacts on Illinois’ small, medium, and large companies, disrupting supply chains and this progress, increasing their costs, creating chaos and wreaking havoc on their ability to operate. Anticipated retaliatory tariffs on Illinois exports will have a quieting effect on Illinois companies’ global reach, harming businesses and raising prices for consumers[3].

Expenditures

The proposed expenditures of $55.2 billion represents an increase of approximately 2.5% over estimated FY25 expenditures[4]. The bulk of the increase is due to:

  • A $350 million increase for the evidence-based school funding formula for K-12 education
  • A $436 million increase in required pension payments under the state’s pension formula to reach 90%.
  • Medical expense increases for the Department of Healthcare and Family Services ($397 million) and the Department of Central Management Services – group health insurance ($341 million).

Excluding pension payments, debt services, and statutory transfers (which total just over 23% of all proposed expenditures), the largest segment of the remaining funds (or what is termed the Operating Budget) is for education followed by human services.

Source: Office of Management and Budget


Immigrant health care and services

Yet, while there is also a significant increase for the Department of Healthcare and Family Services in medical costs, the Governor proposes discontinuing the Health Benefits for Immigrant Adults (HBIA) Program which provided insurance coverage for undocumented residents ages 42-64. A program for undocumented seniors remains in place.

Because enrollment and costs for the HBIA program were higher than expected after the state established the program, it has capped enrollment since the middle of 2023. The Governor’s Office estimates a savings of $330 million in general funds spending with the proposed FY26 HBIA elimination[5].

In addition, the budget reflects a reduction of $129 million in state funds from FY25 Enacted Appropriations, $82 million from FY25 Estimated Expenditures, for Welcoming Centers. Funding for the Immigrant Integration Services line item within the Department of Human Services is level.

PreK-12 Education

The proposed FY26 budget includes an additional $350 million for the state’s evidence-based funding formula for public schools. Illinois overhauled the formula in 2017, which addresses how the state distributes funds to local school districts, in an effort to further reduce disparities in district able dollars across the state. With passage of the revision, legislators pledge to add $350 million dollars above the prior year for each of the next 10 years.

The budget contains level funding for the Early Childhood Block Grant Program. Last year, the state added $75 million to the ECBG Program to increase the number of slots for early childhood programs. It did so as well from FY23 to FY24.

The Illinois State Board of Education (ISBE) budget also increases funding for school categorical grants by nearly $20 million. These grants are required by state statutes for specific purposes such as special education, transportation, and the school breakfast and lunch program. According to the Governor’s Office, the proposed budget fully funds the Special Education-Orphanage Tuition and Regular Orphanage Tuition budget lines.

The FY25 budget approved last May included an additional $50 million for after-school programming. This was, in part, to address a situation that occurred in 2023 with a miscalculation of available federal funds[6]. In a June ISBE memo, staff stated it would be working with General Assembly leadership and the Governor’s Office on guidelines for distributing the funds. As of this writing, ISBE has not issued a Request for Proposals or other directions for release of the funds. The FY26 budget does not contain a similar line item. However, there is level funding of $25 million in another line item for after school programming.

This budget does not address the projected Chicago Public Schools deficit for the 2025-2026 academic year of at least $508.7 million[7].

Higher Education

The Governor’s proposed budget increases funding for public universities and community colleges by a total of $46 million (or a 3% increase in general funds over FY25).

Number of MAP Awards by Fiscal Year
Source: Illinois Student Assistance Commission

The Governor proposes increasing funding for the Monetary Award Program (MAP) by $10 million bringing the total proposed expenditure to $721.6 million. The AIM High Grant Program has level funding[8]. According to the budget, approximately 162,700 students benefit from MAP and AIM High.

The budget contains level funding for the Early Childhood Access Consortium for Equity Scholarship Program.  The state created the program in 2021 to address a shortage of qualified early childhood educators. Individuals who have worked in early childhood education and who are seeking additional credentials or a degree in early childhood education may be eligible.

Finally, there is $21.7 million in the budget for the new Department of Early Childhood as it continues to build its operational infrastructure. In FY27, the Department is scheduled to house the Early Childhood Block Grant Program (now at the State Board of Education); the Child Care Assistance Program, Home Visiting programs, and Early Intervention services (now at the Department of Human Services); and day care licensing (now at the Department Children and Family Services). One of the goals of the new agency is to make it easier for families to access services.

Department of Human Services

The Governor’s proposed budget contains a request for an FY25 supplemental appropriation of $75 million for the Child Care Assistance Program and then another increase for FY26 of $85 million. In 2024, the CCAP program served 140,000 children monthly. The Governor’s Office estimates the number will be near 150,000 by the end of FY26[9].

The SMART Start line-item shows a $90 million increase. The state began the program in 2023 with the intention of providing every child access to preschool, reaching more vulnerable families with support early in a child’s life, and increasing funding for childcare providers (with the dual goals of raising wages and improving classroom qualify)[10].

According to budget documents, the increased funds are to annualize the cost of Early Childhood Workforce Compensation Contracts and replace expiring federal childcare funding. The Workforce Compensation Contracts allow providers to receive funding in advance of services to help cover the costs of higher wages and operating a classroom.

There is a $15 million increase for Early Intervention services, which helps infants and toddlers facing developmental challenges. About two-thirds of this amount is to support rate enhancements for providers.

The budget contains level funding for home visiting programs and a 3% Cost of Living Adjustment for TANF (Temporary Assistance to Needy Families) cash assistance. As note later in the blog, TANF funding could be impacted by future federal action.

Department of Children and Family Services

The budget for the Illinois Department of Children and Family Services (DCFS) includes $53.7 million funding for an additional 100 staff members to continue managing caseloads. For decades, DCFS has been under a consent decree to ensure the Department provided adequate services to youth, that children are placed in the most family-like setting possible, and that (under the last amendment to the decree) the agency maintain enough staff to so there is a maximum of 10 cases per child abuse and neglect investigator.

The budget also contains an additional and a $24 million to support salary increases for private partners and an increase of $15.8 million to, in part, support relative caregivers. Earlier this year, the Governor signed the Kinship in Demand Act (now P.A. 103-1061), which allows DCFS  to develop more flexible standards to certify grandparents and other relatives who are able to safely care for youth in DCFS’s care. The law also creates a path for more youth in care to find permanent homes through guardianship[11].

Other proposed expenditures

  • Proposed funding under the Department of Public Health (DPH) for the agency’s birth equity initiative is level.
  • The FY26 DHP budget also contains level funding for maternal and child health services
  • Within the Governor’s proposed FY26 Capital Budget is $300 million (that would fall under a new bond authorization request) to remediate and prepare surplus state property for economic development. The Capitol Budget also contains another $200 million for expanded site readiness programs.

Not included in the proposed FY26 state budget is a plan for addressing a potential transit shortfall at the Regional Transportation Authority (RTA). According to the agency, it is facing a deficit of $770 million next year. The legislature has been discussing changes to the RTA’s governance and operations structure.

Federal Activity

However, the budget approved by the General Assembly could look very different from the proposed budget depending on future activity by the federal government. As of this writing, Congress is debating a tax and budget package that could significantly impact Medicaid, TANF, the Supplemental Nutrition Assistance Program, and a wide range of other social services. It is also facing the expiration of a continuing resolution funding the federal government until March 14th.

A budget resolution approved by a U.S. House committee, and awaiting a full House vote, would provide for $4.5 trillion in tax breaks and deductions (over 10 years) and $2 billion in budget cuts – with a potential $880 billion cut to Medicaid.

While uncertain if Congress would implement this by block grant funding to states (appropriations to states capped at a dollar level versus a reimbursement percentage) or cuts to specific elements of the Medicaid program remains to be seen.

Currently, the state reimburses the state for about half the cost of the majority of Medicaid expenses. However, the Affordable Care Act opened the Medicaid program up to non-disabled adults at higher income levels and as an incentive provided for a 90% federal match rates to states that expanded the Medicaid pool. Close to 770,000 Illinois receive coverage under the expanded Medicaid program[12]. Illinois law stipulates that it would end the Medicaid expansion program if federal funding is cut.

Project 2025, a document put together by the Heritage Foundation, proposes eliminating funding for Head Start – a preschool program serving low-income children. In Illinois, Head Start funding allows providers to serve more than 28,000 children (and those providers employ more than 9,400 individuals)[13].

Other programs from child care to energy bill assistance to TANF (just to name a few) could be impacted by federal budget cuts.

The Illinois legislature’s scheduled adjournment date is May 31st. Children’s Advocates for Change will be tracking developments in Springfield as well as Washington D.C. and advocating for a state budget that meets the needs of all Illinois children.

Written by Mitch Lifson

Footnotes

[1] Under state law the general funds are comprised of the General Revenue Fund, the Education Assistance Fund, the Common School Fund, the General Revenue-Common School Special Account Fund, the Fund for the Advancement of Education, the Commitment to Human Services Fund, and the Budget Stabilization Fund.

[2] Boak, Josh, “Trump signs a plan for reciprocal tariffs on US trading partners, ushering in economic uncertainty”, Associated Press, February 13, 2025.

[3] Proposed Fiscal Year 2026 Illinois State Budget, p. 28

[4] This includes proposed FY25 general funds supplemental appropriations of $550 million.

[5] Capitol News Illinois, “Blac, Latino lawmakers criticize Pritzker’s proposed budget”, February 19, 2025

[6] Hancock, Peter, “Groups Demand Release of After-School Program Funding”, Capitol News Illinois, February 3, 2025.

[7] Civic Federation, Financial Landscape Analysis of the Chicago Public School District FY2025, January 13, 2025.

[8] Formally titled the Aspirational Institutional Match Helping Illinois Grow Higher Program (AIM HIGH), the program is designed to encourage Illinois residents to attend Illinois public universities. The grant is renewable for a student assuming he or she continues to meet the eligibility requirements.

[9] Illinois Office of Management and Budget, “Illinois Budget in Brief”, p. 18, Proposed Fiscal Year 2026 Illinois State Budget, p. 341

[10] https://www.ilgateways.com/smart-start/smart-start-workforce-grants

[11] Press Release, Office of the Governor, February 5, 2025

[12] HFS briefing on February 19, 2025;

[13] National Head Start Association, Illinois 2025 Head Start Profile

February 24, 2025
https://childrensadvocates.org/wp-content/uploads/2025/02/FY26-proposed-budget.png 932 2147 Mitch Lifson https://childrensadvocates.org/wp-content/uploads/2022/03/childrens-advocates-change-logo.png Mitch Lifson2025-02-24 16:25:512025-02-24 16:41:35CAFC’s Review of the Governor’s Proposed Fiscal Year 2026 Illinois State Budget
Company News

A Message from the President

A Message from Children’s Advocates for Change President Dr. Tasha Green Cruzat
January 29, 2025

As citizens of the state of Illinois, we have a basic responsibility to all residents of the state – especially our children. It is the responsibility to see that they are healthy, educated, housed, fed, and clothed. It is a responsibility to see that no harm comes to them and to see that every child – regardless of that child’s race, ethnicity, or zip code – has the resources to thrive.

A person can be forgiven for questioning how many citizens still hold that sense of responsibility after watching the events of the past week and a half. A memo issued by the President’s Office of Management and Budget, then rescinded, to freeze and re-evaluate funding for a host of federal programs that at their core seek to provide the opportunity to successfully move forward in life. The demonization of parents who hold the same goal as every other citizen to see that they provide for their children and pave the way for a better life for them. There may be more efficient ways to provide programs and services to our children but let’s not make burning down the house the starting point.

In the last several years, Illinois has made great strides in providing needed health care to children and parents, creating new enrollment opportunities in early childhood education and care, and increasing funding for our K-12 school system to promote greater educational opportunities for everyone. No matter what actions the federal government may undertake in the next 60 days and beyond, it would be a shame to let those activities curtail the progress we have made in our state.

In Illinois, we cannot stand by, point towards Washington D.C., and say “look at what they are doing”. We can’t play the blame game. We tried that from 2015 to 2017 when Illinois had a budget impasse. The result was a lot of damage to the lives of many Illinois citizens.

We need to demand from our state and local officials that we stand for the advancement of all our citizens. If that requires more revenue, then we need to find it. Stripping away funding for schools, early childhood services, health care, and housing isn’t going to clear the path forward. It will only put up more barriers that we have worked so hard to remove.

In this time of turmoil, Illinois citizens need to resolve to stand together as one community. We need to take particular care to help our children who, in some cases, may be too young to help themselves. Children’s Advocates for Change will be there every day to wage the fight for needed programs and services. Our resolve to stand together as one community, even if it will mean difficult conversations, will only make us stronger.

Sincerely,
Dr. Tasha Green Cruzat

January 29, 2025
https://childrensadvocates.org/wp-content/uploads/2025/01/smartphone-scaled.jpg 1707 2560 Mitch Lifson https://childrensadvocates.org/wp-content/uploads/2022/03/childrens-advocates-change-logo.png Mitch Lifson2025-01-29 14:42:392025-01-29 14:55:22A Message from the President
Company News

East St. Louis Child Poverty Forum

On September 10, 2024, Children’s Advocates for Change held a child poverty forum in East St. Louis at the Wyvetter H. Young Higher Education Campus. Children’s Advocates for Change President Dr.Tasha Green Cruzat moderated the event, which was attended by more than 120 people.

At the height of the community growth in the 1950s, the city of East St. Louis had more than 82,000 residents. Today, that population is down to just under 18,800 with a poverty rate of 31.6% (more than double the state poverty rate of 11.8%). The child poverty rate among the city’s 3,339 children is even higher: 48.1% (compared to a statewide child poverty rate of 15.9%).

Child poverty can impact a child’s health (physical and mental), educational attainment, and future earnings as well as increase the risk of child maltreatment. Maltreated children are at increased risk for behavioral, physical and mental health problems in their adult lives.

Poverty Forum Agenda

Poverty Forum Speakers, Moderators and Panelists

East St. Louis Census Data

Illinois State Police 2023 East St. Louis Crime Data

Data from the East St. Louis School District 189 Report Card

Deaconess Foundation President and CEO, Rev. Bethany Johnson-Javois welcomed attendees to the Forum.

The President of the Children’s Defense Fund, Rev. Dr. Starsky Wilson was the forum’s featured guest. In his remarks, he stated that child poverty is about robbing young people of opportunities, and we need to do all that we can to unlock those opportunities.

Noting the success the 2021 enhancement of the federal child tax credit had in reducing child poverty nationally, Rev. Dr. Wilson noted that the failure to extend the enhanced credit beyond one year proved “we lack the public will to keep it because we don’t think children deserve to live out of poverty”.

Dr. Tasha Green Cruzat and the Rev. Dr. Starsky Wilson

The Rev. Dr. Wilson talked about the need to restructure the language we use around poverty so as not to stigmatize our children and the need to build a power base to bring about the necessary changes.

Dr. Renee Ryberg of Child Trends helped set the stage for our panel discussions with a review of local data that shows nearly half of all East St. Louis children are in poverty and nearly one-fifth (18.7%) of all residents are in deep poverty.

Other data presented by Dr. Ryberg, showed the percentage of adults with bachelor’s degrees is significantly lower than the statewide average as is thepercentage of individuals with access to high-speed internet service. In addition, the chronic absenteeism rate for students in the local school district is significantly higher than the statewide percentage.

Panelists Dr. Tiffany Gholson, East St. Louis District 189 Superintendent Arthur R. Culver (speaking) and Stephanie Herling

Chronic absenteeism was just one of the subjects that members of our education panel took up in their discussion. East St. Louis District 189 Superintendent Arthur R. Culver talked about a turnaround in academic performance being more than just additional financial resources. It is also, he said, about changing the mindset of faculty.

“We had educators that were providing resources to students, teaching students, but did not really believe in their hearts, minds, and souls that kids could get the job done,” said Culver. He also spoke about how the pandemic, and stay-at-home learning, stalled the progress students – and the district at large – were making in academic performance.

Culver noted for academic performance, and helping curb chronic absenteeism, the importance of having quality, “qualified staff that are really connected with kids and believe that they have the ability to learn.”

Sheila Burton

Panelist Shiela Burton, Executive Director of Every Child Education Equity Project, stated that a key ingredient in that attention of teachers to students,particularly in cases where a large number of students have been exposedtoadverse childhood experiences, is radically smaller class sizes that will help with more individualized instruction.

Adverse childhood experiences, not the least of which is exposure to crime, also impact children’s health.

Dr. Safiya McNeese-Ruffin of the SIU Family Medicine Residency Program in Alton, noted how area children are in a constant state of fight or flight and, with the high stress levels, their bodies are unable to rest. She noted how such a condition, particularly in young children, can lead to cognitive issues, behavioral challenges, and poor school performance.

Moderator Dara Munson and panelist Dr. Mariana Souto-Manning

Dr. Mariana Souto-Manning, President of the Erikson Institute, touched upon how poverty and other adverse childhood experiences impact brain developmentin young children. She also talked about the impact of high levels of stress on children and parents – who worry about their financial situation and in many cases the ability to properly feed their children.

Dr. Souto-Manning noted the importance up building up the community infrastructure for prenatal services and addressing mental health issues for children in child care.

State Senator Christopher Belt, State Representative Kevin Schmidt, and Illinois State Police Lieutenant Elbert Jennings

Our panel of elected and appointed officials noted the need for adequate and sustainable wages. State Senator Christopher Belt stated that elected officials need to make sure residents “have livable wages and they don’t have to work two or three jobs” to make ends meet.

Both Sen. Belt and State Representative Kevin Schmidt spoke about the need to improve the local transportation system.Rep. Schmidt in talking about transportation and the local economy spoke about the need to literally work from theground up to address community flooding issues and the quality of local roads.


We appreciate the input of community residents who noted the need to tackle neighborhood crime and increase parental engagement with the school system.

Mamie Cosie

Gloria Hicks

Yolanda Wooten


Dr. Tasha Green Cruzat

We also want to thank Dara Munson, President of Family Focus, and Jacki Robinson-Ivy, Senior Vice-President at The Northern Trust Company, for moderatingpanels at the event.

In her closing remarks, Children’s Advocates for Change President Dr. Tasha Green Cruzat stated the “fight against child poverty is not just a moral obligation; it is an investment in our future.”

“The children we support today are the leaders, innovators, and change-makers of tomorrow. Let us commit to being their advocates, their allies, and their champions”, said Dr. Green Cruzat.

Written by Mitch Lifson


Child Poverty Forum Photograph Gallery


Press coverage prior to and after the Child Poverty Forum:

Capitol News Illinois – East St. Louis forum to tackle persistent childhood poverty

WVON-AM Interview with the Rev. Dr. Starsky Wilson [On our media page at: https://childrensadvocates.org/media/ ]

St. Louis Public Radio: East St. Louis forum attendees propose community-driven solutions to child poverty

Belleville News-Democrat: How does poverty affect students in East St. Louis? Here are 5 things to know.

October 7, 2024
https://childrensadvocates.org/wp-content/uploads/2024/10/childrenspovertyforum_2024-0062-scaled.jpg 1708 2560 Mitch Lifson https://childrensadvocates.org/wp-content/uploads/2022/03/childrens-advocates-change-logo.png Mitch Lifson2024-10-07 08:45:032025-01-29 16:07:27East St. Louis Child Poverty Forum
Company News

State of Illinois Fiscal Year 2025 Budget

While it took several votes to approve the final revenue package, the Illinois General Assembly passed and Governor J.B. Pritzker signed into law a state budget for Fiscal Year 2025 (which runs from July 1, 2024, to June 30, 2025)[i].

The total approved expenditures are just under $53.1 billion. It is a budget that makes significant investments in children with the creation of a state Child Tax Credit, additional funding for early childhood education and care (including start-up funding for a new Department of Early Childhood)  further investments in K-12 education, and funding for additional staff at the Department of Children and Family Services (DCFS).

Governor J.B. Pritzker signing the state budget;                                     Picture source: Illinois CMS

 Revenue

With the interest in providing additional investments to education, DCFS, and health care for immigrants and asylum seekers along with other areas, this budget is built on approximately $1 billion worth of tax code changes. These include:

  • Extension of a corporate net operating loss deduction regarding losses carried over from prior years. For the past three years, this deduction was limited to $100,000. It is now extended for another three years but the permissible amount of the deduction is capped at $500,000. The extension of this provision, even with the increased cap, is anticipated to generate $526 million.
  • An increase in the sports wagering tax. Up until now, Illinois had a tax on sports betting of 15% of a sports wagering licensee’s annual adjusted gross sports wagering receipts (AGSWR). That will now go to a progressive tax along the flowing lines:
    • 20% of annual AGSWR up to and including $30 million;
    • 25% of annual AGSWR in excess of $30 million but not to exceed $50 million;
    • 30% of annual AGSWR in excess of $50 million but not to exceed $100 million;
    • 35% of annual AGSWR in excess of $100 million but not to exceed $200 million; and
    • 40% of annual AGSWR in excess of $200 million.

The change in the tax structure is estimated to generate $200 million.

  • A cap on the Retailer’s Discount. Previously, retailers were permitted to keep 1.75% of sales tax collected to pay for associated administrative costs. That discount will now be capped at $1,000 a month on tax returns due on or after January 1, 2025. This change is estimated to generate $101 million.
  • Application of the hotel operators’ occupation tax to re-renters of hotel rooms beginning July 1, 2025. The hotel operators’ tax is calculated as a percentage of gross rental receipts from guests. The revenue collected goes to various funds including the Build Illinois Fund, Illinois Sports Facilities Fund and the Travel Industry Promotion Fund). State law also permits Chicago to levy an additional tax up to 1% of gross rental receipts of hotel operators. The state expects this measure to result in an additional $25 million per year.

In addition to these tax changes, there is a transfer of $150 million from the state’s Road Fund to pay for public transit expenses and a transfer of $50 million from the Underground Storage Tank Fund to public transit.

There are a number of provisions in the revenue bill creating tax credits. Chief among them is the establishment of a state Child Tax Credit. This applies only to taxpayers with a child under the age of 12 in the household and is worth 20% of a qualifying taxpayer’s state Earned Income Tax Credit in Tax Year 2024 and 40% in Tax Year 2025. More information on the state Child Tax Credit is contained in a separate one-pager on the tax.

A separate bill, HB 3144, removes the 1% state sales tax on groceries beginning January 1, 2026. The revenue went to local governments. The bill allows municipalities and counties (with respect to unincorporated areas) to adopt a 1% sales tax on groceries.

Expenditures

The largest area of expenditures in the state budget is education, followed by human services and pensions.

Education

The FY25 budget includes an increase of $350 million for the evidence-based school aid formula. Since the state overhauled it in 2017, legislators pledged to put in $350 million above the prior year’s appropriation for each of the next ten years. There is also an additional $75 million for the state’s early childhood block grant (ECBG) program. This amount is one element of the second year of the Governor’s Smart Start Program to improve the state’s early childhood education and care system. With the increase, it is expected there will be an additional 5,000 slots in the ECBG program. Other items related to Smart Start are reviewed in the human services section of this memo.

In addition to the $25 million for after-school programming that was in Governor J.B. Pritzker’s proposed budget, the final FY25 budget contains an additional $50 million for after-school programming for a total of $75 million. As the Illinois State Board of Education (ISBE) notes on its website:

The purpose of the funding is to:

  • Improve academic outcomes for students.
  • Provide opportunities for enrichment activities in a safe and healthy environment.
  • Provide opportunities to strengthen public, private, and philanthropic partnerships so that quality support services are more durable for students facing the greatest challenges.

The $25 million initially proposed by the Governor will be distributed by an RFP process for non-school district entities and a formula grant for school districts that meet low-income eligibility criteria. With regards to the additional $50 million, ISBE will distribute the funds through a competitive grant competition but has indicated it will be working with the Governor’s Office and General Assembly leadership to “determine their intention” regarding how this continued investment in after school funding will be distributed.

The after-school funding allocated through ISBE is in addition to another $17.8 million allocated through the Department of Human Services (DHS) to Teen REACH, which is a youth development initiative that provides after school program services to high-risk youth between the ages of 6 and 17. According to DHS, the core services include improving educational performance, life skills, parental involvement, recreation, adult mentors, and STEM learning

Also, within the ISBE budget is:

  • $45 million for the second year of a three-year pilot program to fill teacher vacancies
  • A $32.7 million increase for grants regarding transportation and special education
  • $10.2 million increase for Career Technical Education to implement a new equity-based funding formula

Higher Education

The FY25 budget includes a $24.6 million increase for public universities and a $6 million increase for community colleges. There is an additional $10 million for the college grant Monetary Assistance Program, bringing the total to $711 million. According to the Illinois Student Assistance Commission, the budget includes (for the first time since FY12) $6 million to reimburse public universities for a portion of the tuition and fees waived on behalf of eligible veterans and National Guard Members. Another $4.2 million is designated to the Illinois Community College Board for similar costs.

Source: Illinois Board of Higher education

New Early Childhood Agency

As noted in the review of substantive legislation, SB 1 creates a new Department of Early Childhood. While the agency will be working over the next two years to shift programs currently under the State Board of Education, Department of Children and Family Services, and the Department of Human Services, the FY25 budget contains $14 million for the Department to begin hiring staffing, opening office space, and hiring consultants to begin the planning for that effort.

Department of Human Services

Among the programs currently at the Department of Human Services (DHS) that will eventually be transferred over are the state’s Early Intervention and Child Care Assistance Programs.

The FY25 budget contains an additional $6 million for the Early Intervention Program, which provides services (including diagnosis) to children aged birth to three with developmental delays. Advocates were seeking a $40 million increase to meet growing caseloads in increase provider reimbursement rates.

Advocates were also seeking $60 for Early Childhood Access Consortium for Equity Scholarships (to support access to academic programs allowing current or potential early childhood employees to complete needed credentials and degrees as well as funding for coaches and mentors) to replace expiring federal funding. However, only $5 million for the program is included in the approved budget.

The budget contains a $36.5 million increase to the Child Care Assistance Program to handle an anticipated caseload increase and another $122 in SMART Start workforce initiatives. This includes:

  • $110 million for workforce compensation contracts (which includes staff wage increases)
  • $10 million for quality support contracts to help with staffing costs associated with higher quality childcare center services
  • $2 million for the Early Childhood Apprentice Program to help childcare centers attract, train and support early care and education practitioners

There is a $90 million increase in the state budget for Home Illinois. While housed at DHS, Home Illinois is an interagency effort to coordinate existing and new initiatives to combat homelessness in Illinois. A large portion of the increased funding ($75 million according to the Governor’s Office) is going towards a court-based Rental Assistance Program to prevent evictions. The Home Illinois budget also includes $13 million to support initiatives to reduce racial disparities in homelessness rates and $67 million to help address housing issues faced by asylum seekers arriving in Illinois (most via buses from Texas).

The FY25 state budget appropriates $115 million for Welcoming Centers. These centers are designed to assist immigrants and refugees in accessing state services. There is also a $38 million appropriation for immigrant services.  According to the referenced Illinois state statutory provision, this line item funds services to legal immigrants that includes, but is not limited to, naturalization services, nutrition services, and financial assistance.

The DHS budget also includes:

  • A $5 million increase for Home Visiting Programs
  • $1 million for grants associated with a pilot program for distribution of diapers to qualified individuals.

Department of Public Health

The Department of Public Health budget includes $4 million for grants associated with a new Birth Equity Initiative including, but not limited to support and capacity building for community-based women’s health providers, the development of an inventory of need and assets, implementation plan to increase equitable access to community-based health providers, and the design of health navigation tools.

Department of Children and Family Services

The Department of Children and Family Services (DCFS) budget includes an additional $50.3 million dollars to support an additional 392 staff positions and rate reform for DCFS providers to address staffing shortages of social service workers. Based on DCFS statistics, the number of investigations has increased 18% since Fiscal Year 2020. There’s also $100 million in capital grants to support increased clinical capacity for youth placement (Level of Care Support Service Grants).

Department of Healthcare and Family Services

The Department of Healthcare and Family Services (HFS) budget contains nearly $498 million dollars to annualize increases in Medicaid rates that became effective this current fiscal year as well as fund FY25 rate increases and add-ons to rates for services (contained in SB 3268) associated with psychiatric care, skilled nursing facilities, children’s community health centers, birth centers, optometry, and safety net hospitals among others.

Illinois has two healthcare programs to cover undocumented residents aged 42 and up: the Health Benefits for Immigrant Adults (HBIA) for individuals aged 42-65 and Health Benefits for Immigrant Seniors (HBIS). The state capped HBIS enrollment in 2023 at 16,500 and on July 1 of that year halted enrollment in the HBIA program. The FY25 budget contains $625 million for the two programs of which $440 million is from the General Revenue Fund. This funding does not remove the existing caps.

The HFS budget also contains $10 million to support a new initiative to relieve medical debt for more than 300,000 Illinoisans. With the funds, the state plans to partner with a non-profit that negotiates the sale or donation of medical debt. The state anticipates erasing up to $1 billion in medical debt.

The FY25 budget did not address upcoming projected budget deficits for state transit agencies (nearly $730 million). There is also the need to modify of supplement the new state Child Tax Credit for extremely low-income children who do not benefit as much from the creation of the credit as higher-income households due to the structure of the Earned Income Tax Credit.

The legislature is scheduled to return to Springfield on November 12th for the state of the fall veto session.

Written by Mitch Lifson.

[i] The actual appropriations bill is SB 251, the omnibus revenue bill is HB 4951 and the budget implementation bill is HB 4959.

June 20, 2024
https://childrensadvocates.org/wp-content/uploads/2024/07/Illinois-State-Budget-Fiscal-Year-2025.png 900 1600 Mitch Lifson https://childrensadvocates.org/wp-content/uploads/2022/03/childrens-advocates-change-logo.png Mitch Lifson2024-06-20 08:20:132024-08-07 08:33:57State of Illinois Fiscal Year 2025 Budget
Company News

A Statement on Illinois’ new Child Tax Credit from Children’s Advocates for Change President Dr. Tasha Green Cruzat and Family Focus President Dara Munson

June 7, 2024

Illinois Governor J.B. Pritzker signed into law today HB 4951 that, along with other measures, creates a refundable state Child Tax Credit (CTC). Illinois is now the 15th state in the country to offer a state Child Tax Credit. The credit will be available to taxpayers eligible for the state Earned Income Tax Credit (EITC), which is 20% of the federal EITC, that have at least one child younger than age 12 in the household. The measure will provide tax relief to hundreds of thousands of Illinois taxpayers.

For this tax year (with taxes payable next year), the new state Child Tax Credit is worth 20% of a taxpayer’s state EITC. It then increases to 40% of a taxpayer’s state EITC for each of the following years. In cases where the credit amount exceeds what an individual owes in taxes, the state will refund that amount to the taxpayers. Between reductions in tax liabilities and actual refunds, the state estimates that the state Child Tax Credit will cost Illinois $50 million this tax year and then $100 million the following year.

Illinois Child Tax Credit Amount
The actual amount of the credit received by a taxpayer will vary depending on the household income range and number of children in the household. For tax year 2023, Illinois taxpayers were eligible for the state EITC if adjusted gross income was no more than $46,560 for a single tax filer with one child and $63,398 for married filing jointly tax filers with three or more children.

Based on 2023 numbers, the maximum state Child Tax Credit would have been $160 for a household with one child and $297 for a household with three or more children. (The federal government adjusts the EITC annually for inflation, but the credit would be worth approximately double these amounts in the following tax year.) While an increase in the federal EITC, from which the state EITC is calculated, accounts for an increase in the number of children in the household up to three, it is a per taxpayer credit and not a per child credit. This is true of the new state Child Tax Credit.

More work ahead
We appreciate the creation of the state Child Tax Credit and these levels of investment in a tight budget year. Even though the rate of inflation is now significantly lower than two years ago, many Illinois families still struggle with high rents and food prices. We also appreciate the continued increases in appropriations the Fiscal Year 2025 budget makes in home visiting, the Early Childhood Block Grant, and K-12 Education.

We also recognize the federal EITC is constructed in a pyramid fashion that gets to the maximum credit level only after reaching an income level of approximately $11,750 for a single tax filer with one child and $16,500 for married filing jointly taxpayers with three or more children. After remaining constant for an income range, the maximum credit begins to decline at higher income levels (around $27,750 for married filing jointly taxpayers with three or more children). By comparison, the Economic Policy Institute estimates a household of one adult and one child needs an annual income of nearly $79,000 to meet basic household needs and maintain an adequate standard of living.

There is still more work to be done to help working families, especially the very poor. Children’s Advocates for Change and Family Focus stand ready to work with our elected officials on additional economic assistance as well as new economic opportunities for Illinois families so that all can thrive.

June 7, 2024
https://childrensadvocates.org/wp-content/uploads/2024/06/Childrens-Advocates-Family-Focus-Logos.jpg 377 467 Mitch Lifson https://childrensadvocates.org/wp-content/uploads/2022/03/childrens-advocates-change-logo.png Mitch Lifson2024-06-07 21:44:372024-08-07 08:33:58A Statement on Illinois’ new Child Tax Credit from Children’s Advocates for Change President Dr. Tasha Green Cruzat and Family Focus President Dara Munson
Page 1 of 512345

Latest News

  • CAFC’s Review of the Governor’s Proposed Fiscal Year 2026 Illinois State BudgetFebruary 24, 2025 - 4:25 pm
  • A Message from the PresidentJanuary 29, 2025 - 2:42 pm

Follow us on Facebook

Connect on Twitter

Tweets by childrensadvocs

Help Us Advocate for our Children

Make A Donation

OFFICE LOCATION

Children’s Advocates for Change
c/o Impact House
200 W. Madison Street, Suite 300
Chicago, IL 60606

Email: info@childrensadvocates.org
Main: 312-361-0101

STAY CONNECTED

  • facebook
  • twitter
  • instagram
  • youtube
  • linkedin

SUBSCRIBE TO US

Get news and events directly to your inbox.

Sign Up Now

ASSOCIATIONS

Children’s Advocates for Change is a proud member the following networks:

Economic Analysis and Research Network

economic-analysis-research-network


Partnership for America’s Children

Notice of Non-Affiliation:
Children’s Advocates for Change is not affiliated, associated, authorized, endorsed by, or in any way connected with Voices for Illinois Children (“Voices”). Voices is an independent advocacy organization that is powered by YWCA Metropolitan Chicago.

© 2023 Children's Advocates for Change is a 501(c)(3) organization | Tax ID number: 88-2843645 Privacy Policy | Designed by JS Interactive, LLC
Scroll to top
Sign Up For News & Updates