Springfield, IL (CAPITOL NEWS ILLINOIS) – As Illinois awaits federal court decisions about federal funding and braces for more federal cuts and rising costs, Gov. JB Pritzker is proposing limited new spending.

The proposed budget totals $56 billion in spending in fiscal year 2027 beginning on July 1, which is up $878 million, or 1.6% from the current year. But most of that news spending is in required categories like education and pensions. Outside those areas, new spending will grow by just 0.5%.

On the revenue side, the governor is expecting $56.1 billion in FY27, which would be an increase of $830 million from current-year projections.

Like the last two budgets, Pritzker is again opting for targeted tax increases that will be paid by businesses rather than consumers. His proposal does not include new taxes on millionaires and billionaires and corporations sought by progressive Democrats.

Pritzker’s administration is also assuming it will win court battles to continue receiving federal funding that President Donald Trump’s administration has attempted to cut. About $1 billion is currently in limbo as the state sues to continue receiving funding, according to the governor’s office.

While overall spending in the budget grows by hundreds of millions, lawmakers and advocates who wanted Pritzker to propose spending big chunks of money on new services this year did not have their wishes granted.

But the governor’s office said the proposal also does not include major cuts to programs.

Funding for K-12 public schools via the state’s Evidence-Based Funding formula will increase by $305 million and, for the second year in a row, excludes roughly $50 million that would be designated for property tax relief.

Fiscal year 2027 will also be the first year the new Department of Early Childhood begins full operations. Funds previously allocated through the State Board of Education, Department of Human Services and Department of Children and Family Services will be consolidated under one roof.

The state’s universities and community colleges will also see just 1% growth in spending for the second year in a row under the plan. The Monetary Award Program, more commonly known as MAP, will have funding remain flat at $721.6 million.

Tax on social media companies

Pritzker’s plan calls for raising $589 million in new revenue.

The hallmark of the plan is a new tax on social media companies with at least 100,000 users in Illinois. The companies would be taxed on a graduated scale beginning at 10 cents per user each month. Platforms with a million or more users would be taxed $165,000 each month, plus 50 cents each month on the number of users over a million.

Pritzker is hoping to raise $200 million from the new tax — a more limited amount than a digital advertising tax floated last year that would have racked in hundreds of millions of dollars each year.

Pritzker’s plan would also raise new funds by adjusting a cap on operating losses reported by businesses and aligning taxes on table and electronic games with each other.

Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.