Sims leads legislation to protect state budget from reckless federal cuts

SPRINGFIELD - In response to devastating cuts to essential programs by the federal administration, State Senator Elgie R. Sims, Jr. led a measure to decouple Illinois tax policy from harmful federal changes and protect the state's Fiscal Year 2026 budget.

"While the federal administration carelessly slashes funding for programs that Illinois families depend on, we refuse to let their recklessness blow a hole in our state budget," said Sims (D-Chicago). "This measure is about protecting Illinois taxpayers and ensuring we can continue funding schools, health care and vital services despite the chaos coming from the federal government."

The federal administration's budget cuts threaten to create a $267 million shortfall in Illinois' Fiscal Year 2026 budget. Senate Bill 1911 would recover nearly $250 million of that lost revenue by strategically decoupling from federal tax policy changes that benefit large corporations at the expense of working families and update definitions to align with federal law.

In the spring, Illinois changed its corporate tax treatment of Global Intangible Low-Taxed Income (GILTI). However, in HR1, the federal government renamed this source from GILTI to Net Controlled Foreign Corporation Tested Income (NCTI), meaning Illinois could no longer count on the revenue from this source. Senate Bill 1911 changes the definition from GILTI to NCTI to fall in line with the federal government, therefore allowing Illinois to continue to claim that revenue. Without the definition change, Illinois would not have access to the revenue because the category no longer exists and would be eliminated from revenue receipts because of the renaming.

The other portion of Sims' measure calls for decoupling from federal bonus depreciation. Federal bonus depreciation is a tax incentive that allows businesses to deduct a large percentage of the purchase price of eligible business assets in the year they're placed in service, rather than depreciating them gradually over several years.

"This is what protecting working families and Illinois' economy looks like," said Sims. "Every time the federal government makes irresponsible choices that hurt working people, Illinois stands ready to protect our residents. We're not going to balance our budget on the backs of students, seniors and struggling families."

Senate Bill 1911 passed the Senate Friday and heads to the governor's desk for final approval.