From Illinois to Wisconsin to Michigan, Midwest governors outlined plans to ameliorate budget crunches made worse by Trump administration policies, focusing on themes like affordability, healthcare and energy, and in some cases offering up new revenue proposals.
When Illinois Gov. JB Pritzker previewed his $56 billion
"Illinois is one of the states whose taxpayers send more dollars to the federal government than we receive back in services," he said, adding that his office calculates Trump administration policies have cost Illinoisans $8.4 billion.
"Illinois is fighting more than 50 cases in court where the federal government is illegally confiscating money that has already been promised and appropriated by the Congress," he said. "If you want to talk about our FY 2027 budget, you must first demand the return of the money and resources this president has taken from the people of Illinois."
Pritzker noted that Trump has slashed healthcare and food assistance, and Trump's tariffs have been
Washington, D.C., also came in for criticism when Wisconsin Gov. Tony Evers delivered his address, which laid out his legislative priorities. Wisconsin's biennial 2025-27 budget was enacted in July.
"I'm worried about the impacts of reckless decisions being made in Washington, and that these decisions will have disastrous consequences for Wisconsinites, taxpayers and our state budget," Evers said. "Wisconsinites are feeling the squeeze due to tariff taxes and erratic trade wars. Prices are going up on things like school supplies, groceries, clothes, gas, and more. Americans last year footed the bill for 96% of the costs from tariffs."
While the state's rainy day fund is at record highs, he said, that may not last long under federal policies.
Michigan Gov. Gretchen Whitmer's
State budget officials
Whitmer said in
The state faces a $1.8 billion deficit for fiscal year 2027, and the Republican speaker of the state House has put tax hikes and rainy day fund withdrawals off the table, according to the Michigan Advance.
And while Whitmer has called for targeted tax relief for some seniors, influential Republicans in the legislature have said they want to see property tax reform for all residents.
Under Whitmer's budget, schools would see slightly more money; the per pupil guaranteed funding base would jump from $10,050 to $10,300, a 2.5% increase year over year, said Craig Thiel, research director at Citizen's Research Council of Michigan.
"This is enough to keep their heads above water," he said of school districts, noting that it represents a ratcheting down of the roughly $400 per-pupil increase last year.
The most immediate impact on Michigan of federal policies is the change to Supplemental Nutrition Assistance Program funding, said Bob Schneider, senior research associate at CRC. That change in cost sharing — from a 50/50 split to 75% state, 25% federal — will bring a nearly $100 million hit to the state in 2028, plus additional costs based on the program's error rate, he said.
Later on, the state will face the loss of Medicaid provider taxes. H.R. 1 put limits on the size of those taxes; it's going to create a hole in Michigan's Medicaid program, Schneider said. The total cost of those two changes alone could approach $900 million, he said.
The rainy day fund withdrawal would help address the budget shortfall, he said. But the shortfall is in part self-inflicted by a bipartisan
"The rainy day fund was never meant to support structural spending when it is not raining," said Michael LaFaive, senior director of the Mackinac Center's Morey Fiscal Policy Initiative. "This withdrawal will effectively impose harder decisions on the next generation of leaders that may need to grapple with a recession."
LaFaive noted Michigan tends to fare worse during recessions than the national average, possibly due to its manufacturing climate, and there have been
Included in Whitmer's budget is a "$150 million, one-time corporate welfare subsidy to engage in site preparation for large industry," LaFaive said. "There are increases in other parts of the budget for what we would call corporate welfare, giving grants to for-profit corporations, that could be eliminated, and then there'd be money left over to cover what the governor views as shortfalls in other areas, such as Medicaid spending."
In a
"We think there's room to cut in the budget," LaFaive said.
In Illinois, Pritzker estimated the 2027 impact of federal actions totals $1.7 billion.
His office also acknowledged that 75% of the budget's increase over fiscal year 2026 expenditures is due to three factors: Illinois pension costs; medical expenditures at Central Management Services, the state government operations hub; and Illinois State Board of Education evidence-based funding for K-12 schools.
Like Whitmer, Pritzker is proposing several new revenue streams. His budget calls for a social media platform fee, which would bring in an estimated $200 million for education, and an adjustment of taxes for table and electronic games at casinos, which would generate about $120 million.
The governor also wants to adjust the net operating loss deduction cap from a sunset to a phased approach, generating an estimated $269 million in corporate income taxes.
Pritzker's capital budget proposes $1.7 billion in new bond-backed funding for affordable housing and other programs.
Pritzker's operating budget proposal includes modest increases in early childhood investments and K-12 education funding and a 1% increase for the operating costs of public universities and community colleges.
The Department of Human Services would get $50 million to hire 450 additional staff and update eligibility systems for SNAP and Medicaid, a necessity given federal changes to eligibility and work requirements in H.R. 1.
The governor's budget includes no broader tax hikes and, while
But Hill said the Governor's Office of Management and Budget had projected a $2.2 billion shortfall in October, and the baseline revenue estimate has since been revised upward significantly.
"Whether or not those revenues play out, I think, is a big question mark in this budget," he said.
Hill also raised questions about the social media fee.
"This wouldn't be paid on a company's annual tax return. A tax would need to be tied to some sort of revenue that companies are making from users," Pritzker spokesman Andres Correa said by email. "This is a fee based on a flat number of users in Illinois on the platforms per month and isn't tied to how much money companies make."
Hill acknowledged it's true, as the governor said, that the budget's discretionary spending increases amount to less than one half of 1%, but said total spending is up 1.5%.
"Without making that full (actuarially recommended pension) payment, it's really difficult to say that this budget is truly balanced, because we continue to push pension obligations and that debt so far down the road," he said.
The Illinois governor also wants a two-year pause on authorization of new data center tax credits, a nod to
In his address, Wisconsin's Evers touted his affordability policies, which included the elimination of the sales tax on household utility bills. He also signaled a willingness to work across the aisle on property tax relief.
Property tax relief could come through several avenues, said Jason Stein, president of the Wisconsin Policy Forum. Additional special education aid could have an indirect effect on school property taxes. Increased general school aid would count against schools under the state revenue limits, and lead to lower property taxes.
The school levy tax credit could also be a mechanism. The credit offsets a share of the property tax levy paid by homeowners and business owners, and there's been some discussion about putting more money into that credit, he said.
It's unclear whether lawmakers will attempt to address any impacts of federal policies in end-of-session legislation, Stein said.
"The governor has talked about wanting additional funding to make sure Wisconsin's (SNAP) error rate is currently low enough that we would not face additional costs under that revision of (HR 1)," he said. "And it seems like the governor and the legislature are having a meeting of the minds on this."
