From the Desk of ISA Executive Director

Jim Kaitschuk

BUDGET

The Fiscal Year 2025 Budget appropriates $53.74 billion in General Revenue funds ($124.6 billion All Funds) and assumes revenue streams of $53.281 billion -- a boost over the current fiscal year of 1.6%, or $815 million. HB 4959 (Welch/Sims) provides the budget framework; see below. HB 4951 (Burke/Villanueva) lays out the omnibus revenue package, expected to generate in the next fiscal year $1.2 billion (a figure that, once tax credits and incentives are offset, is reduced to $746.5 million GRF/$119 million OSF).  The fiscal year starts July 1.

Under this budget configuration, Illinois is on track to make its full pension payment and allocate $198 million to the Rainy Day Fund. Additionally, $182 million in monies is earmarked to accommodate the Governor’s request to address the migrant crisis. Just some $73 million in cuts occurred in the budget, reflected in such areas as ending eligibility for cash assistance to migrants in shelters; reducing the community college PATH effort (which develops the healthcare workforce); and decreasing monies to the Department of Human Services (affecting both its operating and grant program funding).

Public Safety and Violence Prevention: Some 200 new troopers, in two new cadet classes, will be hired and trained through FY25 monies, while the Restore, Reinvest, and Renew Program is slated to get $200 million and $45 million is destined for the Reimagine Public Safety grant program. After-school and summer youth programs will receive $200 million And LETSB will receive $60 million in OSF for car and body worn cameras for law enforcement, $10 million for recruitment and retention and the Less Lethal Grant program was cut from $20 million in FY24 to $5million in FY25.

The budgets passed the Senate 28-21 and the House 65-45 and now heads to the Governor’s desk.

Omnibus Revenue: HB 4951(Burke/Villanueva) addresses new revenues to support the FY 25 spending plan. No new taxes on corporate or individual income are called for, with revenues instead being planned on from a handful of sources. Among them:

• Boosting the sports betting tax and converting it to a graduated tax ($200 million)
• Capping the retailers discount ($101 million)
• Retaining the limit on the Corporate Net Operating Loss Deduction ($526 million)
• Bolstering the video gaming tax ($35 million to support capacity in the capital program)
• Imposing a tax for companies that re-rent large blocks of rental rooms ($25 million)

Also under HB 4951, interchange fees could not be assessed on sales taxes and gratuities. The provision – which does not bring in any new revenue for the state – was intended to appease the retail industry and any opposition it may have to the revenue package. The measure also creates new tax credits and includes several changes and expansions to existing tax credits.

The measure passed the Senate 37-22 and the House concurred 60-47 and he bill now heads to the Governor’s desk.

Budget Implementation: The administration of the FY25 budget is laid out in HB 4959 (Welch/Sims), which passed the Senate 41-18 and the House 62-46 and now heads to the Governor’s desk. The bill:

• Allows grant money involved in the law enforcement camera program to be used for the leasing (in addition to purchasing) of cameras
• Creates new pre-trial success grants

Capital Budget: SB 251 (Sims/Gordon-Booth) also includes $3.5 billion in capital appropriations and reappropriations ($500 million more than the Governor’s introduced budget). Included in the plan is $500 million for quantum computing, $900 million for reconstruction of Logan and Stateville prisons, and $400 million dedicated for local road projects.

BOND AUTHORIZATION

HB 4582 (Crespo/Harmon) creates the Bond Authorization Act of 2024. It authorizes $7.988 billion in new bonding authority ($1 billion in Build Illinois and $2 billion in General Obligation bonds) for capital improvements and development to address the deferred maintenance at the state prisons, colleges, and other state facilities as well as bonding for a new quantum campus. The bill also authorizes the Housing Development Authority to issue 4.3 billion in bonds to help address the growing demand for its single-family mortgage program. Also included: procedural changes to help school districts utilize bonding authority. The legislation passed the Senate 40-18 and the House 72-38 and now heads to the Governor’s desk.

LOCAL GOVERNMENT TAX OMNIBUS

Provisions contained In HB 3144 (Burke/Castro) address an array of local government tax issues. The measure ends (as of January 1, 2026) the state-imposed 1% sales tax on groceries but allows all municipalities to impose their own grocery taxes up to 1%. Under the bill, such a move can be done without a referendum or without requiring state administrative fees. The legislation also permits home rule municipalities to boost sales taxes by 1%. The bill also increases the prepaid wireless 911 surcharge (for municipalities with a population over 500,000) from 3% per retail transaction to 9% per retail transaction and allows the prepaid wireless telecommunications service charge to be applied to prepaid service -- rather than to just wireless cards.  The measure also allows Sangamon County by ordinance to impose up to a 3% tax on renting, leasing, or letting rooms in hotels countywide. Revenues would go to "promoting tourism, competitiveness, and job growth as well as covering debts on bonds. The legislation passed the Senate by a vote of 48-11. The House concurred by a vote of 86-20. The bill now heads to the Governor’s desk.

BUSINESS INCENTIVE PACKAGE

HB 5005 (Vella/Stadleman), as amended by SFA#2, represents an omnibus tax incentive package designed to position Illinois to be more competitive for jobs and capital investment. Projects created under the legislation are expected to generate $21 billion in new revenue over the next 30 years. Highlights of the bill include: creating a Quantum Computing Campus; and extending by five years the Research and Development Tax Credit. The bill also includes changes to the High Impact Business designation, altering the Rivers Edge Development Zone Act (including adding seven more River Edge Zones downstate), and adjusting the EDGE, REV, and Micro acts. The bill also offers incentives to support new industries like sustainable aviation fuel, green steel, and the manufacturing of other electric aircraft components. The measure passed the Senate 51 – 5 and the House concurred by a vote of 90-19 and now heads to the Governor’s desk.

ELECTION OMNIBUS

HB 4488 (West/Morrison) represents the 2024 election omnibus. The legislation makes several changes including codifying certain COVID practices including delivering vote-by-mail ballots to nursing homes and veterans homes; tightening the rules on the prohibited contributions (and imposing a penalty of 150% of the received contributions after 30 days); accommodating park district programming when districts are asked to serve as a polling place; prohibiting “pink slime” websites from publishing detailed voter information (including birth dates and full street addresses); providing greater security/privacy for election judges by changing how their badges are used; removing the primary campaign contribution limits on political party accounts (including legislative caucus committees); tightening the rules on the prohibited contributions; and removing outdated sections of the election code. HB 4488 passed the Senate by a vote of 51-3-3 and the House concurred 68-38. The bill now heads to the Governor’s desk.

PROCUREMENT OMNIBUS

HB 5511 (Hoffman/Castro) is the 2024 Procurement Omnibus, which consists of various legislative measures filed during the 2024 spring session. Key provisions include: authorizes the Capital Development Board to use progressive design build delivery method for up to three public projects prior to January 1, 2027; clarifies the job order contracting process under the code while remaining consistent with the current statutory procurement process (to which Illinois contractors and design professionals are custom); provides the option to cure procurement violations and deficiencies such that procurement can proceed upon remedying the violation or deficiency; authorizes DNR to install EV charging stations, commercial solar energy systems and other clean energy projects at properties within its jurisdiction; makes it easier for local units of government to purchase or lease supplies under state Joint Purchasing Agreements; exempts expenditures to support state hiring efforts and makes changes to the Illinois business bid preference provisions to expand which Illinois-based entities are to be considered Illinois businesses; establishes uniform BEP contract goals; clarifies that the Commission on Equity and Inclusion will supervise rather than oversee the implementation and effectiveness of supplier diversity training of state procurement workforce; expands the Illinois Public Private Partnership program to allow for entities to solicit P3 proposals in Illinois’ five most populous counties; creates a mid-sized business category for Illinois Tollway procurements, to account for certain businesses that exceed the small business; and makes changes to the small business set-asides in the Tollway. The measure passed the Senate 48-7-1 and the House concurred 80-27. The measure now heads to the Governor’s desk. 

CANNABIS OMNIBUS

Efforts to pass a cannabis omnibus passed the Senate 55-1, but did not move in the House in the final days of session. HB 2911 (Ford/Lightford), as amended, represents an omnibus cannabis package. Key provisions include: expanding craft growers to 14,000 square feet; creating a new consolidated transport center license; requiring the Department of Agriculture to maintain a list of dispensing organizations with non-payment for goods or services (similar to the non-payment list in the Liquor Control Act); updating the medical use, cultivation privilege tax section; allowing medical patients to be prescribed medical cannabis via telehealth; removing the list of excluded offenses that prohibit someone from working in a medical cannabis facility; allowing curbside pickup and drive through windows at all dispensaries; expanding the allowable HVAC equipment requirements; providing DOA and IDFPR the authority to unify the employee badging system; allowing DCEO to use a lottery to award social equity grants and loans; establishing standard market protections against unfair business practices; removing a duplicate labor requirement; and cleaning up DOR tax language.  

HEMP REGULATION

Efforts to regulate the hemp industry ramped up during the final weeks of session. While various iterations were introduced, HB 4293 (Buckner/Lightford) became the final Senate vehicle. As amended, the legislation enacts a framework to regulate hemp-derived THC, including delta-8 products. According to Senator Lightford, regulation of hemp-derived THC products would largely mirror the state’s treatment of cannabis with respect to taxing, testing, possession limits and more. The legislation creates regulations for hemp processors and craft growers, so consumers know the actual contents of these products. Only licensed dispensaries would be permitted to sell hemp-derived THC products. Certain retailers and manufacturers licensed under the Liquor Control Act will be allowed to sell beverages derived from hemp until January 20, 2025.  The bill allows social equity craft growers and infusers to process hemp by extracting the naturally occurring chemicals into concentrates. Beginning July 1, all products made by a hemp processor must be sold to either a social equity craft grower or infuser for sale to a dispensary. The bill passed the Senate 54-1 but was not considered by the House prior to adjournment.  

KARINA'S LAW

Efforts to create a process, HB 676/SB 2633, that would accompany Orders of Protection with search warrants filed by petitioners did not move during the final weeks of session.  

HEALTH INSURANCE REFORMS

Governor Pritzker called for reforms to the health Insurance industry during his February Budget Address. The result was HB 5395 (Moeller/Peters), creating the Health Care Protection Act. The measure: bans step therapy for prescription medications; prohibits prior authorization for in-patient mental health care in a hospital setting; creates statewide standards on clinical criteria when performing utilization reviews; requires insurers to publicly list all treatments that require prior authorization; addresses “ghost networks”; and establishes rate reviews for large group health plans. The bill passed the Senate 45-14 and the House concurred with the Senate’s changes by a vote of 83-23-1. The measure now heads to the Governor’s desk

PRISON REVIEW BOARD REFORMS

HB 681 (Cassidy/Harmon) enacts reforms for the Prisoner Review Board, particularly concerning the handling of cases of domestic violence. The legislation focuses on notice, transparency, and training for Board members as well as creating a Prisoner Review Board Task Force. The bill passed the Senate unanimously and the House Judiciary approved the motion to concur unanimously, but the full House did not vote on the measure before adjourning.