* Deputy Gov. Andy Manar sent a memo to all state agency directors yesterday. I’ve highlighted some important passages…
Thank you for the thoughtful work that your leadership team and fiscal office staff put into your agency’s Fiscal Year 2026 budget request to GOMB. Director Sturm and GOMB staff are currently reviewing each agency submission in detail and meeting with agency staff to walk through your budget submission and iterations to your funding requests. The administration appreciates your continued support of the Governor’s mission for providing strategic investments that serve the people of Illinois while prioritizing our continued commitment to fiscal stability and a balanced budget.
However, since Director Sturm provided agency guidance for the FY26 budget in early October, additional information regarding the outlook for the coming fiscal year has materialized that will impact the crafting of the Governor’s request to the General Assembly. The purpose of this memorandum is to provide additional instructions to agencies.
On November 1st , GOMB’s Economic and Fiscal Policy Report1 was published. The report provides a look toward the next five fiscal years and serves as a valuable tool to help us understand the fiscal challenges we face and develop proactive solutions to meet those challenges. This year’s report outlines the impact of a slowing national economy. In addition, the report also begins to quantify the impact of medical inflation, required pension contribution increases, statutory shifts of sales tax revenues away from the General Funds, and FY25 budget transfers that will not be repeated in FY26. The report shows the initial FY26 General Funds revenue forecast is roughly flat to FY25 revenues. The report illustrates that the combined impact, assuming modest agency budget growth in the 2%-4% range, yields a General Funds budget shortfall of over $3 billion. While this shortfall does not reflect the budget submissions provided by your agencies which are currently being reviewed, it does illustrate the magnitude of the challenge that must be addressed as the Governor prepares his FY26 budget submission.
Additionally, the upcoming changes at the national level in the executive and legislative branch are creating some additional uncertainty regarding federal funding and the economic outlook. We need to take steps to ensure that the State is in position to address any economic disruptions that may arise.
Governor Pritzker remains committed to responsible fiscal management. A balanced budget is and will continue to be the Governor’s top priority. As we begin to prepare for many unknowns in the coming year, please begin to work with your Deputy Governors and GOMB staff to review proposed reductions and identify spending that can be reduced further from your submitted FY26 agency budget requests. Please review your submissions and the cuts scenarios provided, and if not already included, submit the following additional information:
• Agencies should identify programs that have increased in recent years, paying specific attention to those added in FY23, FY24, and FY25 and make suggestions for spending reductions and winding down of programs related to:
o line-item grants,
o grant programs,
o programs that assume increasing or additional out-year contributions, and
o other discretionary programs.
• Agencies should identify and quantify operational efficiencies and program consolidations that can reduce costs.
• Agencies should identify potential vacancies that can be eliminated.
• Agencies should develop implementation plans for proposed reductions or winding down of programs, including providing GOMB with relevant statutory changes and timelines for those implementation plans.
In addition to this directive, please keep the following in mind as you go through this process:
• Certain federal programs may be facing funding cuts or elimination beginning in calendar year 2025– the expectation should be that the State will not have resources backfill any of these emerging spending pressures.
• As expected, certain federal funds (e.g. ARPA and other COVID era funding) may be coming to an end– the expectation should be that the State will not backfill any of these previously anticipated spending pressures.
• Agencies should not request non-critical headcount increases and should focus on vacancy reductions as noted above.
• All legislation with new FY26 budget impact should be highlighted for GOMB and for the Governor’s Office. At the direction of the Governor’s Office, no legislation with an increased FY26 fiscal impact should receive agency support.
The Governor appreciates your continued support and hard work. FY26 will be a challenging year but we are confident that we can meet those challenges by working together as we have always done. Please contact me or GOMB’s Director, Alexis Sturm, should you have any questions.
- Donnie Elgin - Friday, Nov 22, 24 @ 11:19 am:
= to review proposed reductions and identify spending that can be reduced further from your submitted FY26 agency budget requests=
This is music to my ears. It comes only when every other possible alternative has been exhausted, and we are left with the cold, hard reality that state revenues will not be sufficient to cover bloated spending.
- Norseman - Friday, Nov 22, 24 @ 11:19 am:
We’ve seen these exercises before. Sometimes they’re just rhetorical shots across the bow to tell the folks not to get too greedy. Other times it’s we’re in the deep doo doo area and you better be cough up real cuts. This is the latter. What frustrated me during these times was the failure of the GA to respond accordingly. JB’s folks need to get the message out to the leaders that the Dems may have the votes, the state doesn’t have the money.
- ChicagoBars - Friday, Nov 22, 24 @ 11:19 am:
City of Chicago budget office should just copy and paste that Manar memo on to their letterhead for use the next two years starting now. But probably won’t.
- Just a Citizen - Friday, Nov 22, 24 @ 11:34 am:
At least the state budget office has read the tea leaves and is positioning itself to address what’s coming.
- JS Mill - Friday, Nov 22, 24 @ 11:37 am:
Manar’s message is well written, no hyperbole or sky is falling emotion. Just facts. Well reasoned facts.
People will hate it.
- Frida’s boss - Friday, Nov 22, 24 @ 11:40 am:
Didn’t the state pass almost $1 billion in new tax revenue last year?
Glad they all keep giving themselves raises the last two years. A GA member with committee chair is now a $100k/yr job.
- TheInvisibleMan - Friday, Nov 22, 24 @ 11:47 am:
This is also a memo to the state legislature, without making it publicly look like it is.
- Rich Miller - Friday, Nov 22, 24 @ 11:56 am:
People, don’t post anonymously. It’s an automatic deletion. Why are you wasting your time?
- Rich Miller - Friday, Nov 22, 24 @ 11:57 am:
===Glad they all keep giving themselves ===
And, right on schedule, here comes the pet peeves that don’t amount to a hill of budgetary beans.
- Anotheretiree - Friday, Nov 22, 24 @ 11:59 am:
Add to the shortfall, the new Dear leader will try impoundment to force IL to comply with roundups. Or any other policy his highness doesn’t like ? The doo doo will get deeper.
- Matty - Friday, Nov 22, 24 @ 12:06 pm:
==A GA member with committee chair is now a $100k/yr job==
As it should be. Contrary to the Session calendar, being a legislator is a fulltime job, and being a committee chair substantially adds to the baseline work load.
- Overbay - Friday, Nov 22, 24 @ 12:17 pm:
Can Manar visit the City budget office and provide some pointers? Once gain, Pritzker administration shows they are the adults in the room.
- Beans Matter - Friday, Nov 22, 24 @ 12:47 pm:
As someone who in my past managed large manufacturing facilities….if you’re not paying attention to the beans the hill will only get steeper…both financially and culturally
- Dirty Red - Friday, Nov 22, 24 @ 12:48 pm:
= At least the state budget office has read the tea leaves and is positioning itself to address what’s coming. =
The budget office and CGFA have been saying this for quite a long time. This is the internal endorsement those voices need.
= This is also a memo to the state legislature =
TL;DR - Don’t argue with Alexis Sturm. She knows more about the state budget than you can possibly imagine.
- levivotedforjudy - Friday, Nov 22, 24 @ 12:54 pm:
Pretty much anyone at a certain level who worked for a state agency has seen a version of this letter. Those 3 years federal largesse were an anomaly. To quote Eminem, “back to reality.”
- Friendly Bob Adams - Friday, Nov 22, 24 @ 1:15 pm:
This gave me a real laugh “Agencies should not request non-critical headcount increases”. One person’s administrative bloat is another person’s critical staffing. Let the games begin….
- Stephanie Kollmann - Friday, Nov 22, 24 @ 1:22 pm:
Surely these funds could be put to better use.
https://www.enr.com/articles/59877-illinois-advances-plan-to-build-900m-prison-replacements
- Honeybear - Friday, Nov 22, 24 @ 1:23 pm:
Ugh…eliminating vacancies. There it is. That’s the reason why over 9,000 vacancies have not been filled in the State employee workforce. Departments can show that they are cutting those positions when the workforce is so near collapse because of lack of personnel.
That being said, I rather them do that than have to do layoffs. At this point I don’t see how they could even pull off layoffs. At my office we have less than half the caseworkers that we had 10 years ago serving 20% more customers. Of course we’ll do our best. Anybody who is still here is a hardened trooper for the State. We’ll go down swinging, but folks, this is bad. Real bad
- Accountant - Friday, Nov 22, 24 @ 1:24 pm:
One would have to think this puts any hope of House staff getting anywhere with their hope for money that matches what their Senate counterparts make out of reach.
Either that, or the people who work for the Senate had better be ready for massive pay cuts.
- Demoralized - Friday, Nov 22, 24 @ 1:32 pm:
==Surely these funds could be put to better use.==
That’s why these and other state buildings are such a disaster. Failure to spend funds on infrastructure.
- Perrid - Friday, Nov 22, 24 @ 1:36 pm:
Looking at programs that started in 23-25 and is discretionary, my mind immediately goes to the Health Benefits for Immigrant Adults and Seniors programs. Seniors might have been before 23, but still, if you remember last year there was a furor because the estimates were like $800 million less than actual expenses. No one wants to kick these folks to the curb, but if we’re talking cuts, those programs seem the easiest, if legislators are actually going to be reasonable.
- Roman - Friday, Nov 22, 24 @ 1:39 pm:
== This is also a memo to the state legislature ==
Agreed. And there are a whole bunch of members who haven’t been around long enough to know what tough budget year is like.
- Long Time Independent - Friday, Nov 22, 24 @ 2:02 pm:
Federal programs may be facing cuts or elimination so says Manar. Well that you can bank on with Trump taking over. And I can say not being a Trump fan, both Pritzker and Johnson might be wise to turn down the rhetoric towards DJT. It’s ok to despise the guy but don’t advertise it so much.
- State of the Union - Friday, Nov 22, 24 @ 2:05 pm:
“A whole bunch of members who haven’t been around long enough to know what tough budget year is like.” That might be true after inauguration, but not in Lame Duck. Last May, Democrats raised a billion dollars in taxes to pay for the budget shortfall. They will do the same this year, and JB will sign it. There will be no cuts, make no mistake. This is Illinois. We spend, we tax, we rinse and we repeat.
- Rich Miller - Friday, Nov 22, 24 @ 2:07 pm:
Stephanie, Illinois is under a federal court order. That’s not a discretionary item.
- Change Agent - Friday, Nov 22, 24 @ 2:34 pm:
“That’s not a discretionary item.”
Sure it is - They have already moved people out of Stateville and into other prisons. Nothing requires a replacement for Stateville.
- Chicagonk - Friday, Nov 22, 24 @ 2:41 pm:
Illinois could cut higher ed capital projects by 20%. The recommended FY25 budget for higher ed (excluding community colleges) is $3B, which divided by 200,000 students is $15,000 per student. Imagine redirecting that money to making tuition more affordable.
- Rich Miller - Friday, Nov 22, 24 @ 2:47 pm:
===capital projects===
Oh, man. C’mon. Do we really have to go through this dumb exercise again? That’s capital money, not GRF.
- Rich Miller - Friday, Nov 22, 24 @ 2:49 pm:
===Sure it is===
Even if I grant you that, and I doubt I will, that’s capital money and not GRF.
- Frida’s boss - Friday, Nov 22, 24 @ 2:53 pm:
@Marty thank you for the Friday laugh
- Southern Dude - Friday, Nov 22, 24 @ 3:08 pm:
===Even if I grant you that, and I doubt I will, that’s capital money and not GRF.===
True, but there would be significant savings in operating costs by not opening new prisons which come out of the GRF such as power bills, water bills, cable/satellite tv, etc. The capital money could be used to repair other prisons.
- H-W - Friday, Nov 22, 24 @ 3:08 pm:
This is going to be some serious business in the realm of education, and especially higher education. WIU already laid off 100 teaching faculty and 35 or so staff last summer. Currently, administrators here (all interim and at the mercy of the Board of Trustees) are planning to eliminated a lot of graduate programs, which will entail further layoffs. And WIU is not alone. With U of I opening its enrollment to average students, we regionals have lost a lot of our student base to the U of I system.
The public regionals that in reality serve just as many students (or more, but of average and lower means) cannot take much more. Collectively, we serve a lot of citizens, without the Big 10 perks.
Absorbing the new revenue cuts coming from the Federal Government is going to be a true test of our public regional system, as it tries to survive under brutal circumstances.
- ChicagoCitizen - Friday, Nov 22, 24 @ 3:12 pm:
Funny that this is exactly what Rep. Crespo was suggesting at the end of session in May but no one was listening then!
- Demoralized - Friday, Nov 22, 24 @ 3:24 pm:
==there would be significant savings in operating costs by not opening new prisons==
You have none of those costs in FY26. You’re not saving any money relevant to cutting the GRF budget in FY26.
- Dirty Red - Friday, Nov 22, 24 @ 3:48 pm:
= there would be significant savings in operating costs by not opening new prisons which come out of the GRF =
I have a hard time subscribing to the idea that older state facilities are more efficient than their replacements.
- Rich Miller - Friday, Nov 22, 24 @ 3:53 pm:
===exactly what Rep. Crespo was suggesting at the end of session in May===
Then he voted against the revenues.