Record Illinois Budget Includes $800 Million in New Taxes as More Residents and Businesses Leave State

By Illinois Review

Illinois lawmakers approved a record-setting $55.9 billion state budget in the final hours of the legislative session, adding more than $800 million in new taxes and fees while continuing a trend that has seen hundreds of thousands of residents and businesses leave the state in recent years.

The budget, passed shortly before dawn on June 1 after lawmakers worked through the night beyond the constitutional adjournment deadline, represents the largest spending plan in Illinois history.

Governor JB Pritzker is expected to sign the measure into law.

Supporters of the budget argue it fully funds pensions, increases support for K-12 education, and maintains state services without raising the individual income tax rate. However, critics say the spending plan relies on a growing tax burden at a time when Illinois is already struggling with population loss, business departures, and one of the highest overall tax burdens in the nation.

The package includes more than $800 million in new revenue measures, including taxes targeting digital advertising, social media companies, cryptocurrency transactions, sports betting, fantasy sports, tobacco products, nicotine alternatives, and various business-related tax provisions.

Legislative leaders promoted the measures as necessary to close a projected budget gap while maintaining spending commitments. The budget arrives as Illinois continues to face significant demographic and economic challenges.

Since 2021, more than 500,000 residents have left Illinois, according to various migration estimates and census data trends. During the same period, more than 1,200 businesses have either relocated operations, expanded elsewhere, or announced plans to move jobs and investments outside the state.

Major corporate departures in recent years have included high-profile employers citing concerns over taxes, regulation, and the state’s business climate. Critics argue the latest budget sends a troubling signal to employers already considering whether to remain in Illinois.

Illinois already ranks among the highest-taxed states in the country when combining state and local tax burdens. Property taxes remain among the highest in America, often ranking in the top two nationally.

Combined with rising sales taxes, fuel taxes, and other fees, opponents argue the cumulative effect is making Illinois less competitive than neighboring states.

Republican lawmakers largely opposed the budget, criticizing both the size of the spending plan and the process used to pass it. Many complained that lawmakers received thousands of pages of budget language with little time for public review before final votes were taken during overnight sessions.

Democratic leaders defended the measure as fiscally responsible and necessary to meet the state’s obligations while preserving critical services.

The debate is likely to continue well beyond the legislative session. As Illinois prepares to implement its largest budget ever, policymakers will face growing questions about whether continued spending growth and new taxes can coexist with efforts to stem the ongoing exodus of residents, employers, and investment from the state.

For many taxpayers, the central question remains whether Illinois can afford another record budget – or whether it can afford the consequences of not changing course.