Executive Order 2025-05, issued by Governor JB Pritzker on September 23, responds to the anticipated fiscal and economic fallout of H.R. 1, a sweeping federal law enacted in July 2025. The order highlights that the law, combined with other federal policies such as new tariffs, threatens Illinois’ economic stability by shifting the costs of programs like Medicaid and SNAP onto the State. It emphasizes the risk to Illinois farmers, healthcare systems, and working families, noting that federal tax breaks for the wealthy will reduce State revenue tied to the federal tax code.
The executive order underscores particular concern for rural and safety net hospitals that face increased uncompensated care, reduced Medicaid funding, and potential closures, especially in underserved areas. These healthcare disruptions, coupled with projected revenue losses in fiscal year 2026, are expected to strain Illinois’ budget and jeopardize essential services for vulnerable populations.
To prepare for these challenges, the order requires State Agencies to submit reports within 30 days outlining strategies to cut costs, reserve 4 percent of their fiscal year 2026 appropriations, and propose programmatic changes if budget shortfalls are expected. Agencies must also halt non-essential spending, restrict travel, and carefully prioritize hiring. These measures are aimed at reinforcing the State’s finances and creating reserves to weather the instability triggered by federal policy changes.
Finally, the order includes a savings clause clarifying that it does not override existing federal or State laws or agreements, and a severability clause ensuring the order remains enforceable even if parts are invalidated. It takes effect immediately upon filing with the Secretary of State.
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