Strategic PartnershipsWith only hours remaining until the deadline, the Illinois General Assembly passed a $55.1 billion state budget for fiscal year 2026 on June 1, featuring the largest site readiness investment in state history alongside significant funding for manufacturing infrastructure, property development and early education. Following Gov. JB Pritzker’s signature on the budget, the spending plan reflects a 4% increase from the current fiscal year.
Notably, the budget does not include funding for the state’s struggling transit system. The Regional Transit Authority faces a $770 million funding shortfall by year’s end, as federal COVID-19 relief funding expires. This gap threatens service levels across Chicago-area transit systems, including the CTA, Metra and Pace bus systems. Lawmakers attempted to pass a separate transit bill with additional revenue sources, but the measure failed during the legislative session.
The budget allocates an unprecedented $500 million for the state’s site readiness initiative, which includes the Surplus to Success program. The initiative funds renovation and general improvements to state-owned properties, along with efforts to attract out-of-state businesses. This represents the state’s most significant investment in preparing land for commercial and industrial development.
Capital investment programs will also receive substantial funding through multiple initiatives designed to enhance Illinois’ competitiveness for business attraction and retention. The Prime Sites Capital Grant Program will receive $75 million to support strategic property development, while the Enterprise Fund gains $50 million for business incentive programs.
Manufacturing infrastructure will see $24 million allocated for manufacturing training academies across the state. These facilities will provide workforce development programs specifically designed to support the state’s industrial sector and prepare workers for advanced manufacturing careers.
Property development efforts extend beyond state-owned assets through enhanced business incentive programs. The budget improves existing programs including EDGE tax credits, which now provide additional incentives for companies investing $100 million or more in Illinois facilities.
The new Advancing Innovating Manufacturing for Illinois tax credit program specifically supports manufacturers making significant capital investments in facilities and equipment. This program targets small- and medium-sized companies undertaking major infrastructure projects within the state.
Educational funding maintains strong levels with $748 million slated for Smart Start Early Childhood Block Grants. This funding has created more than 11,000 new preschool facilities in underserved areas over the past two years, addressing critical infrastructure gaps in early childhood education.
Higher education facilities will receive operational support through a $44 million increase for public universities and community colleges. With a 3% increase, this funding will help maintain existing campus infrastructure and support facility operations across the state’s higher education system.
Health care facility infrastructure will gain support through $40 million allocated to Federally Qualified Health Centers, which serve low-income populations and often require facility upgrades and expansions. Additional healthcare funding includes $24 million for reproductive health facilities and services.
The spending plan includes notable cuts while prioritizing infrastructure investments that, according to lawmakers, position Illinois for economic growth. Revenue increases from business tax changes and fees on sports betting and tobacco products support these capital initiatives without broader tax increases.
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