Illinois Quad-Cities lawmakers warn cuts are coming due to projected budget shortfall

In November of 2024, the Governor’s Office of Management and Budget projected a $3.2 billion deficit for the 2026 fiscal year which begins on July 1, 2025. Gov. JB Pritzker is set to give his State of the State in February, where he’ll lay out his budget plans.

“We’re going to lose programs,” Rep. Gregg Johnson, D-East Moline, said. “We lost a couple of programs last year…which really broke my heart. …I will find out how we get our fair piece of the pie, but no doubt it’s going to be a difficult year.”

Rep. Dan Swanson, R-Alpha, said in a November letter from the Deputy Governor for Budget and Economy Andy Manar requested state agencies start looking at reducing grants, winding down programs and eliminating vacant positions, among other preparations for a the projected budget shortfall. He noted, though, that the budget process is controlled by the Democratic-majorities in both chambers. 

As an example of how this can affect residents, Swanson mentioned a recent time the Western Illinois Area Agency on Aging stopped receiving funding from the state, threatening a source of funding for local senior centers. His support helped reestablish funding, but not every agency is likely to escape harm in a significant budget cut.

Last year, the general assembly avoided a shortfall at the last minute by expanding sources of revenue through increases on tax rates and cuts on tax credit programs.

“No offense to my friends on the other side of the aisle, but we’ve been saying …this is going to happen (for a while) and here we are,” Sen. Neil Anderson, R-Andaluisa, said.

Tackling the projected budget shortfall, Anderson said, is going to take work from both sides of the aisle since cuts are the only way they will be able to balance the budget this year. 

Freshman lawmaker Sen. Li Arellano Jr., R-Dixon, recounted his orientation, where a clip of a pension discussion from nearly a century ago was shown to incoming senators. Arellano was newly elected in the November, 2024, election. The clip, he said, was pondering the danger of how aggressively the state was handling pensions and how it could impact in the future. 

“(A fix) hasn’t happened in 30 years or 50 years or 100 years,” he said.  “If Illinois had even Wisconsin’s funding levels we would have $7 billion more every year going into mental health, infrastructure, tax relief, local government …now there’s battles over childcare …early education …but we can’t afford those things and even less so this upcoming year.”

To the Chamber’s concern that the Illinois Quad-Cities’ housing market is not competitive with Iowa’s, Anderson and Arellano had only agreement.

The two criticized the state’s building and zoning regulations, saying they repel construction companies and drive migration to Iowa.

Arellano said the state’s debt is putting pressure on municipalities through decreasing local government distributive fund and personal property replacement tax allocations, causing increased property and motor fuel taxes.

He pointed out recent pension discussions on elevating public employee’s Tier 2 pension benefits to match federal Social Security benefits would incur a “mammoth price-tag,” that municipalities would be directly impacted by.

Sen. Mike Halpin, D-Rock Island, favored medium-income housing construction tax credits as a solution, freeing up lower tiers of housing.

Swanson noted the effectiveness of the Quad City Land Bank Authority at returning dilapidated properties to functional housing stock through community investment.

Higher education funding

Halpin, singled out for his role Higher Education committee and new role as chair of the Appropriations Educations Committee, explained a proposal for an evidence-based higher education funding formula, replicating what was done with K-12 schools in 2017.

The new formula would take into account student enrollment, actual cost of education and socioeconomic and minority composition of student bodies rather than increasing or decreasing funding to schools across the board.

“It’s particularly important to (the Quad-Cities area) because Western Illinois University has a very good share of underrepresented students that cost more to educate and need additional non-academic supports,” Halpin said. “They would stand to benefit from a formula that takes those things into account.”

The formula is still being developed to make sure it’s “truly equitable” to all universities. It’s projected to cause a $135 million annual increase to the state’s higher education contributions, likely subjecting the legislation to negotiation.

Halpin added he is personally working on legislation to help the university recover from “some difficult decisions they’ve had to make over the past year or so.”