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* My weekly syndicated newspaper column…
Gov. JB Pritzker has “revised” his remarks about not raising taxes to balance the budget.
“It’s very important that we live within our means in this state, and that we not resort to tax increases as a way to, you know, to balance the budget,” Pritzker said Jan. 30.
Last week, when I asked him about his apparent rejection of tax hikes, the governor said: “What I said last week was that we should be living within our means and doing everything we can to do that. I’ve also said in previous press conferences, and still believe that taxes should not be the first but rather the last thing that we look at.”
The latest report from the Governor’s Office of Management and Budget projected Illinois is facing a $3.2 billion deficit in fiscal year 2026. Pritzker’s people have apparently been telling everybody who walks in the door that the state has no money to create or significantly expand the programs folks are demanding.
I’m told they’ve also hinted to at least some that there will be no new revenues proposed in the governor’s budget plan.
However, the door may still be open a crack for new revenues late in the budget negotiations, perhaps meaning “the last thing that we look at.”
Last year’s state revenue bill had a very rough time passing the House when several, mainly white moderate Democrats refused to vote for it. That has been taken by some to mean that tax hikes could be out of the question this spring.
But a longtime Statehouse type made a good point. It’s not that those Democrats were against tax hikes, he said, it’s that they believed they didn’t get anything to speak of in last year’s budget.
“If they believed they were getting something, a Democrat will go (pantomimes voting for a bill), ‘Can I vote again?’ ”
To sell any tax hike back home, they must show how their districts benefit.
However, events could overtake them.
The Illinois Department of Healthcare and Family Services’ list of Medicaid recipients by House and Senate districts has been urgently circulated among legislators for the past several days, mainly because of congressional threats made to reduce or eliminate federal funding for the Medicaid expansion program.
Medicaid expansion covered all adults under the age of 65 who earn less than 133% of the federal poverty level. It has drastically decreased mortality rates for middle-aged people and has generally been seen as a success. Forty states plus the District of Columbia have opted into the program, which reimburses states for 90% of their costs. That large federal share is why several national Republicans are pushing to either end the program or significantly reduce the reimbursement rate.
Healthcare and Family Services says 772,233 Illinoisans were enrolled in the expansion program at the end of fiscal year 2024.
Illinois spent about $815 million on the Medicaid expansion program during the last fiscal year, HFS says. The feds paid out $7.34 billion because, as noted above, they pick up 90% of the total tab, which is far more than the 50% match Illinois receives for “regular” Medicaid.
The point here is that Illinois has a trigger law that requires the state to withdraw from the expansion program three months after federal reimbursement falls below 90%.
So, if the feds had dropped its reimbursement rate to 50% last fiscal year, Illinois would’ve had to shell out $4.1 billion — about a $3.3 billion increase just to keep pace. That’s money the state doesn’t have. Hence, the trigger law.
The House districts with the most Medicaid expansion recipients in FY24, according to HFS, were Rep. Bob Rita’s 28th (15,557); Rep. Sonya Harper’s 6th (15,118); Rep. Nick Smith’s 34th (14,631); Rep. Sue Scherer’s 96th (14,103); and Rep. Lilian Jiménez’s 4th (14,055).
Rep. Rita Mayfield’s district had 8,714 expansion recipients last fiscal year. The Gurnee Democrat told my associate, Isabel Miller, “I do believe that we shouldn’t drop not one person. I think that we need to find the money one way or another,” suggesting that “reasonable cuts” be made to state agencies.
“I think that if we held everybody at FY24 levels, we would have enough money to at least fill in some of these gaps,” she said.
Sen. Dale Fowler, R-Harrisburg, said, “If changes in federal funding occur, I am committed to working with my colleagues to explore all options for preserving essential health care services and protecting our most vulnerable residents.”
Fowler represents 18,174 Medicaid expansion recipients.
I doubt they’ll have the cash to do much of anything without new revenues.
Also, as subscribers know, I checked into Rep. Mayfield’s idea. It doesn’t really provide much cash.
posted by Rich Miller
Monday, Feb 10, 25 @ 8:35 am
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I wouldn’t be shocked if Illinois raises the state income tax rate. They sure don’t want to cut spending.
Comment by Steve Monday, Feb 10, 25 @ 8:52 am
Steve, who should be cut? Asking for a friend.
Comment by very old soil Monday, Feb 10, 25 @ 8:54 am
The thing is, a change in federal funding was a promise of the Trump/Musk campaign and is now a defining feature of the administration. Republicans enthusiastically participated in flinging the barn door open on cuts to vital programs people rely on and it’s too late to think any revenue action the state can take can close it. Folks can consider all the options they want either with or without their colleagues; there is no realistic way for state government to pick up the funding slack.
I want Republicans to at least pretend to regret the position they’ve put our state in and to try to convince their colleagues in DC to hold the line. The right first move is to stand up publicly and say, “Cutting these programs is wrong and I oppose any move congress makes that cuts funding for programs my constituents rely on.” I want a Republican to say, “Your plans hurt my people, so don’t do that.” It’s just not that hard.
Illinois already sends more money to the feds than we get in return. Raising our flat tax rate hurts the same people already being hurt by the federal cuts. Asking taxpayers to foot more of the bill for federal programs when we are already subsidizing Musk’s government side-hustle more than other states is a bad first move. It’s not only a bad deal for taxpayers, it’s also a false promise given that there is no revenue scheme that can make up for cuts in federal programs.
Comment by Who else Monday, Feb 10, 25 @ 8:59 am
The Medicaid cuts, if they come, will destroy state budgets across the country, red and blue states alike.
Comment by Friendly Bob Adams Monday, Feb 10, 25 @ 9:02 am
We’re already looking at a $3 billion deficit and if the feds cut the ACA expansion rate we’d be looking at ANOTHER $3 billion, and some legislators are trying to sell the idea that we wouldn’t need a hike? $6 billion is like 12% of the state budget, does anyone actually think we can cut that by cutting “waste” or “inefficiencies”, without cutting actual services that help people? I don’t.
Comment by Perrid Monday, Feb 10, 25 @ 9:19 am
Hey downstate republicans, just let me know where to send the check. Always happy to prop up the dead economies of rural America that are populated by people who vote to end the public benefits their towns depend on every single time.
Comment by Larry Bowa Jr. Monday, Feb 10, 25 @ 9:24 am
as usual, the GA is not listening, as there are many pieces of legislation filed that take dollars out-
like tax credits, and enhancing tax credits in place
Comment by Drunken Sailors Monday, Feb 10, 25 @ 9:26 am
==FBA== You’re assuming they won’t selectively impound blue state money.
Comment by Anotheretiree Monday, Feb 10, 25 @ 9:36 am
==I want a Republican to say, “Your plans hurt my people, so don’t do that.” It’s just not that hard.==
Any answer that starts with “Republicans should…” is not an answer. They won’t. They have thus been routinely punished by IL state voters. Democrats hold supermajorities in the General Assembly and every statewide office, and will continue to do so for the foreseeable future.
Now what?
Comment by Garfield Ridge Guy Monday, Feb 10, 25 @ 9:38 am
How much does IL spend for its 10% of Medicaid expansion that’s part of the ACA? Is there anything that can be done directly with those funds, assuming no Medicaid match since these people are not typical Medicaid population, to provide some sort of coverage to those who could lose it if expansion goes away? How much money are we talking about here?
Comment by Career politician Monday, Feb 10, 25 @ 9:38 am
==Any answer that starts with “Republicans should…” is not an answer. They won’t.==
I don’t think this observation is wrong. But I’m not willing to concede the point. It’s still worth saying what should happen, particularly when it’s not unreasonable.
==so now what?==
We all sleep in the bed we made. There’s no amount of republican support for a tax increase that can make the federal cuts not happen.
I’m not suggesting we shouldn’t stop the bleeding we can stop. But it’s not ok to let people who participate in the cutting pretend to be heroes of the people for putting a band aid on a gaping flesh wound.
Comment by Who else Monday, Feb 10, 25 @ 10:00 am
Most of the states that haven’t opted into the Medicaid expansion program lean right politically. It is a statutory requirement that was reduced from 95% to 90% gradually. Similar to other programs like the % reimbursement for special education which went from 40% to ~15%ish (although discretionary), I predict it will be reduced gradually. Illinois can always remove the trigger for 89% reimbursement.
Comment by Two Left Feet Monday, Feb 10, 25 @ 10:01 am
After March 14th there will be no federal dollars appropriated for any programs unless congress can somehow agree on something. No state will be able to make up that amount of money even with an increase in revenues. Maybe DJT can do for the country what Bruce Rauner did for the State of Illinois.
Comment by One Trick Pony Monday, Feb 10, 25 @ 10:06 am
I have not seen any recent polling, but I believe that voters do not believe that raising taxes should be the “last choice.”
I think they believe that borrowing is the worst option.
Followed by cutting education and health care.
Then maybe followed by raising taxes.
The Paul Simon Institute used to poll this stuff.
Comment by Thomas Paine Monday, Feb 10, 25 @ 10:10 am
@career politician
From the column. “ Illinois spent about $815 million on the Medicaid expansion program during the last fiscal year, HFS says. The feds paid out $7.34 billion because, as noted above, they pick up 90% of the total tab, which is far more than the 50% match Illinois receives for “regular” Medicaid.”
Comment by Juice Monday, Feb 10, 25 @ 10:15 am
It is not just the Medicaid expansion funds that the State of IL has to be concerned about losing. Funds for Public Education, Head Start, even Meals on Wheels (plus a long list of other items) could be shortened or curtailed. The State of IL can not (even with a tax increase) provide for all the services that could be affected.
Comment by Appears Monday, Feb 10, 25 @ 10:21 am
Thanks, juice. I need to read more thoroughly.
Comment by Career politician Monday, Feb 10, 25 @ 10:28 am
The area of the State that I live in is already facing a property tax increase because of stagnant sales tax receipts. They are also considering a grocery tax. The idea of a income tax hike by the State would not be warmly received. The stagnant sales tax receipts is a symptom of a bigger issue. Prices for everything are high and appear to only be going higher. Once the discretionary spending stops…then we might be facing a much larger problem.
Comment by Appears Monday, Feb 10, 25 @ 10:29 am
The looming threats against the Internal Revenue Service suggests that the states will need to adopt a larger role in tax enforcement. The Trump Administration and their Elon have made it very clear that they have nothing but contempt for a society in which the rich pay their taxes.
The State of Illinois needs to take measures into our own hands to make sure people that owe us taxes are filing and paying those taxes.
Comment by Candy Dogood Monday, Feb 10, 25 @ 10:33 am
This all self inflicted - Illinois and other Dem run states thought the covid money would continue flow forever- so if the funds were temporary- shouldn’t the spending bd as well?
Comment by Sue Monday, Feb 10, 25 @ 10:57 am
It’s time to get serious about Illinois Constitutional Pension reform
Comment by It's always Sunny in Illinois Monday, Feb 10, 25 @ 10:58 am
“It’s time to get serious about Illinois Constitutional Pension reform”
It’s like you can set your watch by it.
Comment by Flyin'Elvis'-Utah Chapter Monday, Feb 10, 25 @ 11:06 am
=== “Cutting these programs is wrong and I oppose any move congress makes that cuts funding for programs my constituents rely on.” ===
And as long as Congress does nothing? It seems to me we can anticipate a do-nothing Congress for the foreseeable future, while the Federal Executive runs roughshod over spending programs. I expect more from Congress. That they are not meeting expectations (like, I don’t know, “governing?”), demands that they be called out openly. If a Congressperson is allowing their represented people to do without medicine, food, housing, etc., that requires they be primaried and challenged, not green-lighted.
Comment by H-W Monday, Feb 10, 25 @ 11:17 am
-It’s time to get serious about Illinois Constitutional Pension reform -
I want more benefits. You can come up with new revenue.
Comment by Retired Proud Monday, Feb 10, 25 @ 11:18 am
==thought the covid money would continue flow forever==
The state used it as one time. Try another talking point @Sue.
Comment by Demoralized Monday, Feb 10, 25 @ 11:19 am
“Illinois and other Dem run states thought the covid money would continue flow forever”
Medicaid expansion was the result of the Affordable Care Act (”Obamacare”) of 2010.
The first American case of COVID-19 was reported on January 20, 2020.
It’s been years since I studied physics, but it seems highly unlikely that the cause occurred 10 years after the effect.
– MrJM
Comment by @misterjayem Monday, Feb 10, 25 @ 12:17 pm
==who should be cut?==
The lowest priorities in each department.
Comment by City Zen Monday, Feb 10, 25 @ 12:26 pm
Pritzker and the General Assembly will raise taxes. The question is what kind, and how much?
Comment by Aurora Asteroid Monday, Feb 10, 25 @ 12:45 pm
I’m tough on Pritzker for reliably taking political wins over governing wins and I was incredibly disappointed when he announced no new revenue. I’m slightly encouraged he walked it back.
But his continued insistence that cuts are preferably to new revenue are why I ultimately can’t take him seriously.
Comment by SWSider Monday, Feb 10, 25 @ 12:54 pm
Pritzker is running for reelection next year so of course he’s saying that he won’t raise taxes as that would be campaign suicide. But as others say, a tax increase is likely.
Comment by Raccoon Mario Monday, Feb 10, 25 @ 1:00 pm
==It’s time to get serious about Illinois Constitutional Pension reform==
Sigh. We’ve seen this movie over and over again. Move on already.
Comment by Demoralized Monday, Feb 10, 25 @ 1:08 pm
“I want a Republican to say, “Your plans hurt my people, so don’t do that.”
It should or will happen at the rate it’s going. It happened to Rauner. But they brought it on themselves, as Republicans like to say.
Comment by Grandson of Man Monday, Feb 10, 25 @ 1:18 pm
I thought we’d jettisoned this kind of derp after Rauner.
– MrJM
Comment by @misterjayem Monday, Feb 10, 25 @ 1:34 pm
For all of you talking about cutting waste I would venture to say that a lot of the things you might consider “waste” are in the budget because the General Assembly wanted it there. Hence why everyone talks about cutting but no member of the General Assembly wants *their* items cut . . . but every else’s getting cut is fine. Problem is everyone is everyone else.
Comment by Demoralized Monday, Feb 10, 25 @ 3:23 pm
Taxes will be raised.
It’s why the Governor walked back his absolute comment on no new revenue within days. A “read my lips” quote is never a good thing.
Now, it’s just a matter of who takes it on the chin this time. Last year were the banks and gaming, with some others.
Who will this year’s victim or victims be?
Comment by Frida's Boss Monday, Feb 10, 25 @ 5:03 pm