Gov. JB Pritzker's affordability-focused $56B budget proposal includes new tax on social media companies
SPRINGFIELD — Gov. JB Pritzker appealed to residents’ pocketbook concerns at a time when “everything is just too damned expensive” while arguing the case Wednesday for his $56 billion state budget proposal, one that leans on a new tax on big social media companies to help weather gloomy economic straits.
But the Democratic governor closed out his annual State of the State address with a message of love in the face of “cruelty and rage” under President Donald Trump’s administration.
“We are fighting over whether we are going to be a civilization rooted in empathy and kindness — or one rooted in cruelty and rage,” Pritzker told the General Assembly at the Illinois State Capitol, denouncing Trump’s enhanced deportation campaign. “What you choose to arm yourself with in this fight — love or hate — exposes which side you are fighting on. Only the weakest of people believe that love is the weakest of weapons.”
Pritzker’s budget address didn’t approach the fiery oratory he unleashed last year when he likened the second Trump administration to the early days of Nazi Germany. Nor is he rocking the boat much with the eighth spending proposal of his tenure, a mostly status quo budget that allows Illinois Democrats to highlight cost-of-living concerns in a midterm election year as Pritzker seeks a rare third term and mulls a 2028 presidential run.
In either case, the subject of Pritzker’s ire remained the same.
"When Donald Trump is taking resources away that are rightfully ours, none of us — Democrats or Republicans — should be OK with that,” Pritzker said.
“So as we embark on this journey of maintaining our state’s now re-established record of fiscal responsibility, I want to say to anyone on either side of the aisle: if you want to talk about our FY2027 budget, you must first demand the return of the money and resources this president has taken from the people of Illinois,” he said to cheers from Democratic supermajorities.
Pritzker outlined other highlights of his spring legislative agenda, which will include a push to cut red tape on local zoning laws to allow for more duplexes, granny flats and other options to increase housing supply and lower prices. He'll also advocate for a ban on cellphones for students in schools, additional social media privacy protections for children, a two-year pause on new data center tax credits and a crackdown on junk fees on tickets and many other online purchases added at checkout.
They’re among the affordability issues that Pritzker devoted the bulk of his 45-minute speech to, just as Democrats nationwide are doing in an effort to retake control of Congress this November, complaining of rising costs in health care, housing, education and energy — and pointing the finger directly at Trump.
“We won’t let headwinds from Washington stop us from addressing the fact that Illinoisans, like Americans everywhere, are still paying too much for groceries, too much for housing, too much for electricity, too much to live,” Pritzker said. “Everything is just too damned expensive.”
Federal pressure
The governor’s budget team pointed to persistent threats of funding cuts under President Donald Trump’s administration as the impetus for what largely amounts to a maintenance budget at about $56 billion in spending, up about $878 million from the current budget year and landing at a projected surplus of $24 million. In addition to the new tax on social media companies, Pritzker aims to make ends meet with new taxes on casinos and big corporations.
The governor’s office had projected a $2.2 billion budget shortfall in October, now estimating $399 million in lost revenue next year due to congressional Republicans’ funding cuts for many social services and other federal programs, and the state assuming about $100 million in new administrative costs for food assistance and Medicaid programs.
Meanwhile, the state is fighting in court to retain about $1 billion in various federal grants, all of which is included in the proposed budget as credit analysts predict a rocky year for the Illinois economy.
To help make ends meet, some $200 million would be banked from big social media companies that Pritzker wants to tax, based on the number of users they have in the state.
It’s similar to the tax Chicago Mayor Brandon Johnson proposed in his city budget proposal last fall, a controversial measure that was retained in the alternate spending plan ultimately approved by City Council members. Tech companies have vowed to challenge it in court on First Amendment arguments, and signaled a potential state-level fight, too.
Chiding social media sites that “profit off of surveilling youth, creating addictive algorithms, and abandoning their responsibility to keep kids and consumers safe,” Pritzker’s plan would charge the companies a monthly fee based on the number of users in Illinois they have beyond 100,000. That would be at rates of $0.10 per user up to 500,000 users; $40,000 plus $0.25 per user up to a million; and $165,000 plus $0.50 per user over a million.
The governor’s proposal also counts on $269 million in additional corporate income tax revenue by adjusting how much big companies can deduct as losses over several years.
Pritzker’s plan calls for generating about $120 million by taxing table games at casinos at the same rate as slot machines, which are currently at a higher bracket. That’s the governor’s only proposed change to gambling taxation in the state after two years of major levies on the state’s massive sports betting industry.
The governor’s spending plan includes $305 million for schools under the state’s evidence-based funding formula, a figure short of the usual $350 million because the remainder was used as part of a property tax relief program last year.
It also makes the state’s required $10.7 billion payment toward pension systems that are collectively facing more than $140 billion in unfunded liabilities. Pritzker announced he'll renew his push to extend the state’s goal of reaching full funding by 2048, instead of current law aiming for a 90%-funded level by 2045.
And it keeps spending level at $143.6 million to cover health care costs for immigrants 65 or older who lack legal status, a key point of contention in last year’s budget talks, when a program for middle-aged immigrants was eliminated.
Reaction from Republicans, Democrats
The governor’s proposal doesn’t include any of the progressive revenue ideas that had been pushed by the General Assembly’s left flank, including taxing digital ads and gains on billionaires’ assets, hiking taxes on offshore earnings and closing other corporate tax loopholes.
Nor did Pritzker’s budget team mention a possible surcharge tax on millionaires, an idea that has been floated by Illinois House Speaker Emanuel “Chris” Welch, D-Hillside, that would require a state constitutional amendment. A similar Pritzker-backed initiative failed in 2020.
“I’m going to continue to talk to advocacy groups and build support for it, and certainly would welcome the governor’s support of it,” said Welch, additionally signaling an openness to the proposed social media company tax but noting “it’s just a start.”
Senate President Don Harmon, D-Oak Park, offered a similar assessment of Pritzker’s budget proposal as a “responsible, balanced” starting point for the next three months of negotiations in Springfield. Lawmakers have to approve a spending plan by the end of May for the fiscal year that starts July 1.
Illinois Senate Minority Leader John Curran, R-Downers Grove, said his caucus could support the school cellphone ban, but he didn’t like much else of what he heard.
“The governor spent a lot of time blaming President Trump and the federal administration for Illinois’ budget woes, which is simply not true,” Curran said, slamming the corporate tax adjustment proposal. “He’s continuing to move the goalposts on businesses that are trying to simply plan ahead.”
Illinois House Minority Leader Tony McCombie, R-Savanna, said it sounded more like a presidential stump speech than a budget proposal.
“I don’t feel like we heard a budget address that's going to make taxpayers of Illinois feel very proud or secure today,” McCombie said. “Illinois doesn't need another campaign speech, it needs a responsible and transparent budget that puts Illinois families first.”
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