DeKalb Times

The Governor’s Office of Management and Budget (GOMB) has released its budget forecast for Illinois for Fiscal Year 2026. The projection is part of the annual “Illinois Economic and Fiscal Policy Report,” which outlines expected state revenues and expenditures for the fiscal year starting on July 1, 2025. The newly elected Illinois General Assembly will address the FY26 budget in spring 2025.

The GOMB's analysis incorporates current revenue and expenditure trends reported by the Illinois Department of Revenue (IDOR) to the Commission on Government Forecasting and Accountability (CGFA). Additionally, economic forecasts from S&P Global were used, considering global data on interest rates, labor market growth, and GDP growth, impacting Illinois' economy. These indicators suggest continued stagnation in state tax revenues due to flat employment numbers and consumer spending patterns, resulting in near-zero growth in income tax and sales tax payments to IDOR.

In contrast, "locked-in" state spending continues to rise. Contracts with organized labor and commitments to key interest groups such as pension benefit recipients and school districts are driving a significant increase in expenditures for FY26. Given these stagnant revenue projections and increasing spending commitments, GOMB has preliminarily projected a $3.2 billion deficit for the FY26 budget.

This projected deficit is independent of any additional financial pressures that might arise from new or expanded programs initiated by either the General Assembly or the Governor.