2.24.2026

 News from Springfield

Good afternoon, Chamber members!

This week, both the House and Senate are in Springfield on Tuesday, February 24th through Thursday, February 26th. This is the last time both chambers will be session together until March 24th.

Last week, both Chambers of the Illinois General Assembly convened together in the Statehouse for the first time in 2026. The House and the Senate each posted a lengthy list of committee hearings, but over half of all committees for the week were cancelled. Committee action in the first few Session weeks of the year is often delayed until deadlines approach, and most of the bills that pass out of committees this early are technical in nature and noncontroversial.

As session progresses, expect more action weekly as each chamber approaches their respsective committee deadlines.

Response to Governor Pritzker's State of the State and FY27 Budget Address

Last Wednesday, Governor JB Pritzker delivered his eighth joint State of the State and Budget Address to both Chambers of the General Assembly. Within his speech, Governor Pritzker covered several key topics, ranging from a two-year suspension of the Data Center Investment Tax Credit to proposals for increasing housing development within the State. The Illinois Chamber posted and distributed to media a statement in response:

The Illinois Chamber of Commerce appreciates Governor Pritzker’s FY27 Budget Recommendation that seeks to address many of today’s economic challenges. We understand that balancing a budget requires making tough decisions with limited resources. However, this budget proposal contains several concerning provisions that send the wrong signal to existing Illinois businesses and those seeking to locate here. 

The Chamber certainly shares the Governor’s desire to build more housing, spur nuclear energy development to lower the cost of energy for consumers, and invest in vocational training programs. Unfortunately, the Governor’s proposal also relies on policies that could have negative impacts on business development, cost of living, and overall tax burden on Illinois job-creators. 

Today’s announcement that the State will be suspending the Data Center Investment Tax Credit, one of Illinois’ greatest economic development tools in recent history, risks accelerating the State's negative economic outlook. Further, relying on flawed revenue and regulation proposals, such as the Net Operating Loss Deduction corporate tax change, the Social Media Platform Fee, the so-called “junk” fee ban, and misguided policy targeting our robust insurance industry, sends the wrong message to Illinois employers and the workers and communities they support. 

The Illinois Chamber of Commerce remains committed to working with the General Assembly, Governor’s Office, and willing partners to advance innovative solutions that prioritize economic growth, affordability, and fiscal stability. 

Tax and Budget Update

As mentioned above, Governor Pritzker last week unveiled his FY27 Budget Recommendation before the Illinois General Assembly. This will start a month’s-long process to produce a budget that that will likely seek to consider many of the priorities outlined by the Governor in addition to programs and priorities of the Illinois Genera Assembly. Below is a brief recap of the major highlights contained in the budget package.

FY27 Budget Proposal Overview

It is fair to say that the Governor delivered a less-fiery State of the State speech this year compared to speech he delivered this time last year. While the Governor’s Office previewed the budget package as being a “Maintenance Budget” and one that was looking to be “balanced,” there were several legislative and appropriations-related items of concern.

In all, the FY27 Budget Proposal totals $56.055 Billion, an increase of 1.5% over FY26. While in October of 2025 the Governor’s Office of Management and Budget released figures pointing to a $2.2 billion budget deficit, the Governor’s FY27 budget proposal included FY27 base revenues of approximately $1 billion above those earlier estimates.

Looking at the FY27 spending plan, the Governor’s Office is relying on $56.032 Billion in estimated expenditures, an increase of $878 million over FY26 (an increase of 1.6% of revised estimated spending). According to the Governor’s Office, the majority of the expenditures increase in FY27 are tied to the following:

• $305 million to the Illinois State Board of Education for the Evidence-Based Funding Model that provided resources to school districts in the State
• $192 million in additional pension contributions, but fully funding the FY27 statutorily required contribution
• $269 million in additional medical expenditures at CMS

Under this revenue and spending proposal, the Governor’s Office is anticipating an end of year surplus of about $24 million budget surplus.

Investment Priorities

Some of the major areas of focus the Governor’s budget proposal prioritizes is the following:

• Early Childhood Education and Child Care Funding
• K-12 Education
• Higher Education
• Health and Human Services
• Public Safety and Violence Prevention
• Growing the Economy and Modernizing Business Development
• Environmental, Natural, and Cultural Resources

Some highlights from each of these spending priorities above include:

• The Governor announced an Executive Order (2026-01) that directs the ICC and IPA to undertake efforts to explore the expansion of nuclear power generation in the State. The effort, additionally, calls for the formation of a working group to explore the possibility of developing 2 GWs of nuclear energy and begin construction on facilities by 2033.
• Increases EBF funding in FY27, $305 million; $1.5 million for implementation of the Illinois Comprehensive Literacy and Numeracy Plan.
• $721.6 million to Monetary Award Program (MAP) grant funding.
• With a focus on affordable housing, champions the Building Up Illinois Developments or BUILD Plan, which promises to free up zoning barriers to housing development, leverages public transit-oriented development, and seeks to streamline permitting processes. The budget, too, contains several capital grant opportunities, such as the Missing Middle Housing Infrastructure (M2I) initiative under DCEO.
• Creates a new “EDGE Essentials” tax incentive program for independent grocery stores and pharmacies in food or pharmacy deserts.
• Creation of new Area Career Centers under the direction of DCEO and ISBE.
• Continues investments in several other programs, including the Site Readiness Illinois Program to prepare State-owned sites for potential investment.
• The Governor will also propose a two-year extension to the State’s Pension Buyout Program which incentivizes retirement-eligible State employees to consider a pension buyout.

New Taxes and Revenue Enhancements

While the Governor ‘s budget certainly contained many priorities that align with a better workforce and the potential for a stronger business community, the IL Chamber was very concerned with some of the new proposals that the Governor expressed support for during his budget presentation. Below is an overview of some of these onerous proposals.

Corporate Tax Changes – Phase-In of Net Operating Loss Deduction

Under current law, due to changes passed in the 2024 budget package, caps were placed on the allowable NOL deductions. While positive for state revenues, these dollar limitations have resulted in an accrual of losses for businesses given the State’s 20-year carry-forward allowance for net operating losses.

This year, the Governor’s Office is proposing that, starting in fiscal year 2027, businesses will be able to apply the NOL deduction to their current-year tax liabilities until they reach a cap of 20% of current earnings. Over the next three fiscal years, that cap will increase to 40, 60, and 80% of current income. According to the Governor’s Office, these changes will align with the federal tax code and 22 other states in how it treats NOL deductions. In FY27, there is an anticipated tax increase of $270 million.

Social Media Tax

Following the lead of the City of Chicago, which recently enacted a “Social Media Amusement Tax” under its FY26 budget passed in December 2025, the Governor’s FY27 Budget proposal includes a “Social Media Platform Fee” as part of his “Social Media Safety Act” proposal that is purportedly designed to promote online safety and privacy.

Under the Platform Fee, social media companies (identified as X, Facebook, Instagram, and TikTok in the FY27 Budget Book) will be assessed a monthly fee according to the number of active Illinois users the platform has. The structure is as follows:

• If the company has between 100,000 and 500,000 users per month, the fee will be $0.10 per user each month.
• If the company has between 500,001 and 1,000,000 users per month, the fee will be $40,000 plus $0.25 per user each month.
• If the company has over 1,000,000 users per month, the fee will be $165,000 plus $0.50 per user each month.

The Governor’s Office is anticipating $200 million in new State revenues under the implementation of the tax.

Casino Games Tax Adjustment

Also included in the Governor’s revenue package is a change to table game tax structures at 15 of the 16 casinos in Illinois (with the notable exclusion of the Chicago Casino). For FY27, the proposal will apply a new graduated tax structure to table games at casinos to purportedly increase the overall effective tax rate of casino-derived revenues. The proposed change will generate an additional $120 million.

Additionally, the Governor’s proposal includes the following changes:

• 2-year pause to the Data Center Investment Tax Credit
• Reverts back the percentage of income taxes paid to the Local Government Distributive Fund (or LGDF) to “hold harmless” units of local government (generating an additional $60 million for the State).
• Expressed support for so-called "junk fee" prohibition legislation

To view the Governor’s full FY27 Operating Budget Book, please click here.

As the Illinois Chamber clarified in our statement, the new or increased tax increases proposed by the Governor’s FY27 budget package gives us strong concerns about the possible negative impacts it will have to the State’s overall business-friendliness and economy.

As revenue and budget items continue to evolve, we will be keep members informed of any movement on any major budget proposals. We do not anticipate major action on any item of consequence until later this spring.

Tax, Energy, and Environment Committee Action This Week

Senate Committee Action

In the Senate, there is a lighter Committee Posting week. While the IL House will not be back in Springfield for several weeks following this week, the Senate will be in this week and the next few weeks.

Senate Revenue was not scheduled to meet this week, and therefore, several of the major tax bills that have been introduced this session will not have a hearing this week. We anticipate that to change in the next couple of weeks, as the Committee will likely be taking up several subject matters as in years’ past. The Chamber will be meeting with Chairwoman Villanueva soon to discuss the approach the Senate will be taking on revenue proposals. The Senate President has indicated a thorough review process with any bill with a revenue impact. We anticipate this possibly leading to several revenue proposals being held in Committee.

On the Energy and Environment side, there are a couple of items we are watching this week in the Senate. This week, the Senate Environment & Conservation Committee will be meeting to, among other items, hold a subject matter hearing on groundwater. In addition, there is SB 3556 (Ellman) that we are closely monitoring.

House Committee Action

In the House, there is another busy week of Committees scheduled. This being the last week the Chamber is in Springfield prior to their two-week hiatus from Springfield, we anticipate some activity to occur—though—several Committees have already cancelled.

This week, we are monitoring the following:

• SB 3593 (Sims) – Telecomm Theft – Metal Recycling
• HB 4456 (Faver Dias) - LI-HEAP Utility Rates
• HB 2629 (Canty) - GHG in Transportation
• HB 3596 (Moeller) – Wetlands Protection Act
• HB 1146 (Ness) -Plastic Bag Reduction
• HB 4652 (Cassidy) - E-Cigarette Stewardship
• SB 3556 (Ellman) - PCB Minimum Standards Air/Water Pollution, Drinking Water, Water, Landfill
• HB 2789 (Canty) - Mega Projects
• HB 4513 (Mayfield) - R&D Credit Permanent
• HB 4636 (Hoffman) - New Markets TC
• HB 4894 (Hernandez, N.) - Digital Ads Tax

Tax + Finance

On the Tax side, House Revenue is scheduled to meet twice this week. The first meeting occurred earlier today and quickly advanced a measure (HB 598) that would delay the property tax sales in Cook County for 2025 (in addition to addressing an issue related to PTELL levies). The second meeting of the Committee contains several bills of both concern and some items we support that are posted, however, the Committee is unlikely to move many of these items.

One conversation on the Revenue & Finance side that we have been hearing about is the Mega Projects proposal that has been tied to the Chicago Bears and the debate around incentives to entice the Bears to build a new stadium in Chicago/Illinois. Last week, it was rumored that one iteration of the bill (HB 2789) would be heard in Committee—however, there was no consensus over the language in the bill and negotiations are ongoing. Given the House will not be in Session for the next couple weeks, it is unknown whether or not a bill will be moving forward at this time.

The Chamber will be meeting with the Chair of House Revenue & Finance soon to discuss some of the major items on the agenda this Session. As you are aware, the Chamber unveiled our 2026 legislative agenda earlier this month, and we will be looking at scheduling subject matter hearings on many of these items.

Energy + Environment

On the Energy & Environment side, the Chamber continues to monitor several proposals that are introduced. This week, the House Public Utilities and Energy & Environment Committees, notably, will be meeting. There are several proposals that we are engaging on and watching. It is very likely that both Committee do not take any action this week.

• One update on the issue largely: the IL Chamber and other business groups have begun to meet on environmental justice policy. We are told that the issue is one that the Governor’s Office may have interest in working on this session. This year, Leader Gabel (HB 5374) and Sen. Villanueva (SB 3772) have the introduced comprehensive EJ proposals. We will be working with the coalition on opposing the bills as is and assess the political will to take any variation of these bills up this Session.
• On the regulatory side, the IL Chamber continues to stay engaged on the Future of Gas proceedings taking place at the ICC. The proceeding recently has been extended, yet again, further into 2026—with meetings currently scheduled through May.

View the full list of monitored bills in relevant committees here.

Tech & Innovation Policy Update

Whether it concerns artificial intelligence, data center development, data privacy, autonomous vehicles, or algorithmic pricing regulation, the business community’s development and use of emerging technologies to meet rapidly changing and rising consumer demands has been met by a series of restrictive legislative proposals.

Last week, the Chamber closely followed Governor Pritzker’s State of the State remarks for new policy goals from the Governor’s office on the subjects mentioned above. The result were new proposals from the Governor’s office to remove data center investment incentives and the creation of a new fee targeting social media companies.

This year alone, over 20 bills were filed, which in some way place new regulations on AI development, deployment, or usage by consumers. Another half dozen bills are seeking to further interject the state into the data center development process. Data privacy remains a lingering conversation, both related to health data and general consumer practices.

While some of these bills certainly have more potential to gain traction than others, we are tracking and taking each of these proposals seriously. Attached is a document that divides some of the major categories within the tech policy landscape and includes each of the bills with potential business impact.

If you haven’t already, please provide your company’s feedback where possible. The Chamber will likely oppose many of the bills included within the document if they were to be posted for committee.