Governor JB Pritzker delivered his annual State of the State and Budget Address on Wednesday, February 15.
This was the Governor's fifth State of the State and Budget Address, the first budget of his second term and the first time in two years that the address was delivered in-person to a joint gathering of the House and Senate in the House chamber. The last two budgets were delivered in alternative formats due to COVID restrictions in 2021 followed by a massive snowstorm which cancelled some session days in 2022.
The Governor’s speech struck an optimistic tone, highlighting the fiscal accomplishments of his first term including eliminating the $17 billion bill backlog, allocating $2.3 billion into the Rainy Day Fund and using fiscal restraint to position Illinois for six credit rating upgrades. The Governor also noted that Illinois is using budget surpluses to chip away at long-term liabilities, including pension debt.
The proposed State Fiscal Year (SFY) 2024 budget allocates $118.9 billion All Funds spending, including $49.642 billion General Revenue Funds -- down $349 million over FY23. Surpluses are projected in both the current and upcoming fiscal year: $303 million surplus for SFY 2024 and $1.368 billion for SFY 2023.
The Governor contends the proposed budget is predicated on conservative revenue estimate, in light of predictions of a looming recession. The SFY 2024 budget assumes $49.944 billion in base General Funds revenue, which is a $1.4 billion (2.8%) decrease from revised SFY 2023 estimates. Individual income taxes are forecast to grow $778 million (3.3%). Offsetting that projected increase are predicted declines: corporate income tax forecasts assume lower corporate profits, sales tax growth is projected to remain flat; transfers-in are expected to drop by $1.279 billion; and federal revenues are expected to remain flat over last year.
Human services will receive the largest spending increase at $912 million. Education, including higher education, will receive the next largest increase at $791 million. Healthcare costs will rise by $709 million and public safety expenditures would increase by $224 million.
Specifics from the proposed budget are available below:
Rainy Day Fund: The SFY 2024 proposed budget continues to prioritize stashing funds in the State’s Budget Stabilization Fund (commonly referred to as the Rainy Day Fund). FY24 targets $138 million for the Budget Stabilization Fund, while the SFY 2023 budget is expected to receive $1.174 billion from surpluses.
Pensions: The SFY 2024 proposed budget fully funds the state’s pension obligations while also setting aside $200 million for the Pension Stabilization Fund.
Smart Start Illinois/Early Childhood Education: Governor Pritzker is proposing a four-year Smart Start Illinois plan that will ultimately create 20,000 additional seats for 3- and 4-year-olds in preschool programs. The proposed SFY 2024 budget allocates $250 million for its first year, distributed as follows:
- $75 million additional for the Early Childhood Block Grant at ISBE to create 5,000 preschool spots.
- $130 million to begin funding Childcare Workforce Compensation Contracts to offer raises to childcare workers.
- $40 million increase for early intervention programs to maintain services and offer provider wage increases.
- $5 million to expand DHS’ Home Visiting Program to reach families in need of support.
In addition to the Smart Start Illinois funding, Governor Pritzker is proposing additional early childhood education funding, including:
- $100 million to improve early childhood provider buildings and facilities.
- $70 million to cover increases in the Child Care Assistant Program.
- $20 million for DHS to revamp the payment system to providers.
K – 12 Funding: The SFY 2024 budget includes an additional $571 million for the Illinois State Board of Education. The Evidence-Based Funding Formula is increased by $350 million. An additional $86.4 million is allocated for transportation grants and special education grants. Another $70 million is directed towards a new three-year pilot program to improve the teacher pipeline.
Higher Education: The SFY 2024 proposed budget includes a $219 million increase for higher education. MAP funding is increased by $100 million. The Governor believes this boost -- combined with federally funded Pell grants - is sufficient to allow attendance of college free of tuition and fees for nearly every community college student and 40 percent of public university students (whose household incomes are at or below median income levels).
Public Universities and community college operations will receive a 7% increase ($100 million) in the Governor’s proposed budget. Community college investments include: $8.3 million for dual credit and one-credit workforce grant programs, $11 million for development of advanced manufacturing, EV technology and data center workforce training programs, and $750,000 to expand English language services.
Healthcare and Family Services: The SFY 2024 proposed budget allocates $37.188 billion All Funds, including $9.070 billion GRF to the Department of Healthcare and Family Services.
SFY 2024 Medicaid liability is projected to total $25.88 billion All Funds, with a total program enrollment of more than 3.7 million (1.2% increase over SFY 2023). The SFY 2024 budget proposal allows for the end of the federal public health emergency; redeterminations will begin this Spring. The budget also reflects the Spring 2023 phase-out of the enhanced federal Medicaid match.
The proposed budget includes $8 million for a “Ready to Renew” campaign to help Medicaid enrollees maintain their coverage or transition to other health insurance. The proposed budget includes funding to raise the asset limit for senior enrollees or those with a disability. Also included is $100 million for increases in reimbursement rates for providers.
The “Healthcare Works Illinois” program will receive $450 million over multiple years, aimed at preserving and expanding the healthcare workforce. Hospitals, clinics, behavioral health providers, home health workers, and others will be eligible for the funding -- monies can be used for such areas as expanding entry pipeline for healthcare workers, continuing education trainings for providers, and other vital investments in staff retention and recruitment.Other noteworthy investments include a $3 million allocation towards the Healthcare Workforce Loan Repayment and Scholarship program; a $25 million rate increase for physicians to broaden access to critical healthcare services; $25 million of continued funding for the Pipeline for the Advancement of Healthcare Workforce Program to train new nurses, medical assistants, lab techs, EMTs and others.
Homeless Prevention: The Governor is proposing a “Home Illinois” program, housed at the Department of Human Services, which will target the prevention of homelessness, provide crisis response, expand housing support and increase job opportunities for the homeless. An initial investment of $350 million will include:
- $26 million to provide homeless prevention services to 5,000 families.
- $30 million to maintain court-based rental assistance.
- Over $155 million to support unhoused populations seeking shelter and services.
- $25 million in rapid re-housing services to 1,000 households.
- $40 million for Permanent Supportive Housing.
- $12.5 million to create 500 new scattered site permanent supportive housing units.
- $37 million for Emergency Shelter Capital to create over 460 non-congregate shelter units.
- $30 million to provide street outreach, medical respite, and other shelter diversion supports.
- $5 million for a new workforce development pilot program to help homeless adults attain and retain employment.
Department of Human Services: The SFY 2024 proposed budget includes $2 billion ($200 million increase) for services for people with developmental disabilities in support of the Ligas consent decree. Also included is a $50 million increase for TANF. The proposed budget includes $10 million to fund the Children’s Behavioral Health Transformation for Comprehensive Community Based Youth Services and $1.5 million for a care intake portal. An additional $30.8 million is in the proposed budget to address growing caseloads with the Home Services Program and $10 million is budgeted to support the Paid Leave for All Workers Act. Another $32.5 million is targeted to increase forensic inpatient and outpatient services and support the Williams and Colbert consent decrees.
Department of Children and Family Services: The proposed SFY 2024 budget increases the DCFS budget by $54.6 million. The proposed budget:
- Continues rate reform for private sector providers in order to address staffing shortages of social service workers at DCFS partner agencies.
- Allocates $10 million towards the Lone Worker Safety Devices program for emergency communication and supportive partnership contracts with local sheriff offices, enhancing safety protocols and the acquisition and training in the use of items like defensive sprays.
- Increases by $41 million increase the main rollout of the Comprehensive Child Welfare Information System.
- Earmarks $30 million for Level of Care Support Services capital grants to provider, helping to increase capacity for youth placement in the most clinically appropriate settings.
Illinois Department of Public Health: The proposed SFY 2024 budget includes $45 million to support IT replacement for the Illinois’ National Electronic Disease Surveillance Systems and Long-Term Care systems. Another $8.5 million is targeted to respond to unexpected public health threats and emergencies; $18 million to support reproductive health initiatives (see below); $7 million to improve public health communications in order to reduce health disparities; and $2 million for mental health training for front-line workers in the pediatric field.
Reproductive Health: Reproductive health continues to be a priority for the Pritzker administration. The Governor calls for creating a new Reproductive Health Public Navigation Hotline to enable patients to call ahead for a risk assessment and find services such as transportation, lodging, and insurance coverage options. The proposed budget also allocates $5 million toward learning collaboratives for worker training to address the shortage of reproductive healthcare workers.
Other Funding Increase:
- $27.4 million for the Community Care Program to serve an estimated 68,000 seniors
- $8 million for the Home-Delivered-Meals Program
- $17.5 million for two Illinois State Police Cadet Classes
- $5.2 million for motor vehicle and body camera cloud storage
- $30 million for camera grants to local law enforcement
- $10 million for resources to local law enforcement agencies for recruitment of new officers and retention plans
- $20 million for the new Illinois Grocery Initiative to address food insecurity
- $40 million to support the Social Equity Cannabis Loan program
- $20 million to support Illinois entities seeking competitive federal awards that align with the state’s economic development plan
- $20 million for Fast-Track Workforce program to help employers do employee screening, recruitment, and job training
- Carries forward the $400 million set aside in FY23 for efforts that support job creation and business development through the Invest in Illinois Act closing fund
- $10 million for a multi-year initiative to develop and implement a one-stop business portal to assist individuals wishing to create new businesses or relocate a business to Illinois
- $10 million to start a Clean Energy Career and Technical Education pilot program, helping high schools to develop technical education programming on electric vehicle manufacturing.
- Maintains OSLAD grants for local government for community park projects at its current level of $56 million
- LGDF is held flat to FY 23
- $20.5 million for addition Electric Vehicle rebates
- $10 million in capital funding for new Lead Service Line Replacement Inventory grants
Capital Budget: The proposed SFY 2024 budget includes $46.5 billion in total capital appropriations ($4.97 billion in new capital appropriations), including: $3.3 billion for the Department of Transportation; $1.1 billion for the Environmental Protection Agency; $244.6 million for the Department of Natural Resource; $151.5 million for the Capital Development Board; $97.0 million for the Department of Commerce & Economic Opportunity; and $85.5 million for other State agencies. Highlights include $100 million in new funding for early childhood education facilities, $20 million for new Rebuild Illinois Downtowns and Main Streets awards for community revitalization and $25 million to bolster the Illinois Works Pre-Apprenticeship Program.
Resources with additional information related to the SFY 2024 State Budget are available below:
Text of the Governor's Address
The "Budget in Brief" Presentation
The "State Capital Budget: State Fiscal Year 2024" Proposal
The "State Operating Budget: State Fiscal Year 2024" Proposal
The "SFY 2024 Proposed Budget Key Elements" Document
The SFY 2024 Proposed Programatic Fact Sheets
Each year, the Governor proposes a budget for the following state fiscal year. The House and Senate will hold hearings during the spring to develop their own budget proposals. The Governor and General Assembly will then negotiate over differences with the goal of approving an agreed budget prior to adjournment. The General Assembly is scheduled to adjourn on May 19 this year.