(Bloomberg) -- Illinois Governor JB Pritzker on Wednesday said his administration is preparing for potential budget hits from the incoming Trump administration, following a similar warning from California’s Gavin Newsom earlier this week.
Pritzker, a second-term governor, is expected to propose a spending plan for the year starting July 1 in just over a month, and his budget office’s five-year analysis is projecting a deficit of about $3 billion for fiscal 2026. Pritzker described the upcoming budget as “challenging” but added that since taking office, he’s addressed a number of fiscal crises in Illinois.
“We are doing the best that we can to try to predict the things that might happen,” Pritzker told reporters in Springfield, the state capital, on Wednesday. He said he’s weighing the possibility that potential changes “will create another hole in the budget,” adding that President Donald Trump’s actions are “so unpredictable.”
The billionaire Democrat said he’s concerned about whether changes may be made to Medicaid and what impact the Department of Government Efficiency may have on the electric vehicle industry, which he has sought to expand in Illinois. Electric vehicle maker Tesla Inc.’s co-founder Elon Musk is one of the two heads of the new department created by Trump.
“We are all going to have to be on guard,” Pritzker said.
Illinois isn’t the only large blue state on alert. In California, Democratic Governor Newsom told reporters on Monday as he previewed his upcoming budget proposal that the state’s surplus could disappear depending on the actions of the incoming Trump administration and congressional Republicans.
“We have examined a lot of the angles that we think the administration will come at states, not just Illinois, but we expect that there will be some serious partisanship,” Pritzker said. “We don’t know what they are going to do, and it’s so unpredictable.”
Pritzker is set to unveil his next spending plan on Feb. 19, and the state legislature, which is controlled by Democrats, is expected to vote on it before June.
“We need to consider that as we’re putting a budget together and debating it over the next four and a half months or so,” Pritzker said.
The lowest-rated US state has fixed a number of fiscal issues in the last several years including passing budgets on time, building up a rainy day fund and increasing contributions to its underfunded pensions.
(Updates with details on recent fiscal improvements in the last paragraph.)
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