Key Takeaways for Counties
- Governor Pritzker signed the Fiscal Year 2027 budget on June 16, 2026.The nearly $56 billion spending plan takes effect July 1, 2026.
- The proposed reduction in the Local Government Distributive Fund was not adopted.
- Counties and municipalities will continue to receive 6.47 percent of state income tax revenues through LGDF.
- Natural growth in income tax collections is expected to increase total local government distributions.
- ISACo will continue to analyze budget provisions affecting county government.
On June 16, 2026, Governor JB Pritzker signed Illinois' Fiscal Year 2027 budget into law, completing the budget process for the fiscal year that begins July 1, 2026. The spending plan totals nearly $56 billion and represents the state's eighth consecutive balanced budget under the Pritzker administration.
The budget approved by the General Assembly earlier this month relies on several new revenue sources and modest spending growth as state leaders continue to navigate economic uncertainty and concerns about potential reductions in federal funding.
Positive News for Counties and Local Governments
One of the most significant outcomes for counties and municipalities was the legislature's decision to reject Governor Pritzker's proposal to reduce the percentage of state income tax revenues distributed through the Local Government Distributive Fund (LGDF).
Under the enacted budget, the LGDF share remains at 6.47 percent, preserving the current revenue-sharing formula. Because state income tax collections are expected to grow, local governments are anticipated to receive increased dollar amounts in Fiscal Year 2027. Had the Governor's proposal been adopted, local governments would have experienced an estimated $60 million reduction statewide.
Throughout the spring legislative session, local government organizations advocated strongly against any reduction in the LGDF percentage, arguing that flat or reduced revenue sharing would shift costs to property taxpayers and threaten essential services.
Budget Highlights
According to the Governor's office, the Fiscal Year 2027 budget is designed to maintain the state's fiscal stability while continuing investments in education, health care, housing and other priorities. State officials describe the plan as the eighth consecutive balanced budget and emphasize that it avoids broad-based increases in the individual income tax or sales tax.
Legislative leaders noted that the final budget was crafted amid uncertainty surrounding federal funding and the possibility of additional fiscal pressures from Washington.
The enacted budget includes several new revenue measures and minimal overall spending growth compared to the current fiscal year.
ISACo Monitoring Implementation
ISACo will continue reviewing appropriations and budget implementation measures that affect county government and will provide additional information to county officials as details become available.