The Illinois Senate has passed a substantial $53.1 billion budget. This decision, which came late Sunday night, steers state towards a fresh financial course for 2025. The budget kicks in on July 1, 2024 and approved by a 3821 vote. It will gather around $53.3 billion in income. Although there were setbacks past their self-set deadline, the approval from the Senate is an important phase, as the House is set to vote on the budget this week.

Celebrations and Criticisms

Sunday night saw lawmakers rejoicing after long hours of private talks. The resulting budget, shaped by intense discussions over the weekend, mirrors Democratic Party objectives. However, some members desired more funds despite tight monetary limits.

The chief negotiator for the budget Sen. Elgie Sims, D-Chicago talked about the fairness and balance of this budget and said that although it’s not perfect it safeguards investment in our future.

Despite being governed by a supermajority of Democrats, there were disagreements within the party with two members not voting for it. Not a single Republican voted for this budget as they believed that it overlooks Illinoi citizens while increasing spending.

Sen. Chapin Rose R-Mahomet thinks of this as Governor J.B. Pritzker’s stepping-stone to his presidential aspirations highlighting problems like higher taxes lack of educational funding and increased spending.

Increased Taxes on Sports Betting and Video Gaming

Prior to the vote there was strong opposition against governor’s original plan of introducing new revenue streams worth $1.1 billion through tax hikes which lawmakers lessened to about $840 million $870 million. The tax on sports betting will rise from 15% to somewhere between 20%- 40% influencing companies like DraftKings and FanDuel. Despite these changes, the tax is likely to produce an additional $200 million in revenue with the total tax of $350 million contributing to state funds and capital initiatives.

Jeremy Kudon, president of the Sports Betting Alliance warns that this increase in tax could negatively affect legal betting market as well as operators’ partners in state including vulnerable casinos who depend up on this income for job creation and community investment.

Taxes on video games will see an increase from 34% to 35%, which will generate a surplus of $35 million adding to capital initiatives local government earnings.

The budget proposed by Governor Pritzker in February roughly amounts to be $52.7 billion saw most of his wish list items included such as second year of the Smart Start Illinois initiative aiming for universal preschool by 2027 and allotment of $182 million towards handling immigrant issue in association with Cook County and Chicago. Another $440 million is allocated for health benefit plan similar Medicaid intended to help noncitizen adults.

The expansion of child tax credit that proposed earlier just for children below ages 3 now cover children up to age 12 costing state approxmately $50 mn in FY25.

Removal of Grocery Tax and Modifications at Local Governmental Level

A significant deviation from Pritzker’s plans is the elimination of grocery tax which earlier was scheduled for removal has now postponed till January1, 2026. Local administrations have been authorized impose grocery taxes up to 1% without any need for a referendum allowing them to equalize potential losses.

The Illinois House is expected to take up budget on Tuesday. Senate President Don Harmon expressed optimism for budget’s passage stating that Democrats aligned on spending plans in both houses.

Main points of the budget,

• Sports betting tax increase from 15% to between 20%-40%, this is expected to add $200 million more.
• Video gaming tax rise up from 34% to 35%, this will generate an extra $35 million.
• Smart Start Illinois funding for making preschool universal by 2027.
• Funding for immigration issue sat a cost of $182 million, in association with Cook County and Chicago.
• Child tax credit expansion now catering to children up to 12 years old, setting the state back by $50 million in FY25.

Conclusion

The Senate’s decision to pass a $53.1 billion budget is seen as major legislative see off addressing various priorities while also paving the way for new taxes. As move towards House crucial aspect would how does it affect Illinoisan citizens and state’s financial health