Illinois’ budget on track for deficit as new federal policies create challenges

by Ben Szalinski, Capitol News Illinois

October 10, 2025

Article Summary

The governor’s office now projects a $267 million deficit for the current fiscal year 2026 budget.

Corporate tax cuts enacted at the federal level, combined with tariffs and declining consumer spending, is causing state corporate tax revenue to decline.

The governor’s office recommends state lawmakers consider decoupling state tax policies from the federal tax code in certain areas.

In the coming years, the governor’s office projects deficits will grow even higher as new federal policies require the state to pay more to support social service programs while receiving less federal funding.

The deficit is projected to grow to $2.2 bi

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