Economy

Hard budget decisions await states in 2026

Fiscal analysts project significant deficits for some.
Illinois Gov. JB Pritzker delivers his State of the State and budget address before the General Assembly at the Illinois State Capitol, Feb. 19, 2025. (Brian Cassella/Chicago Tribune via AP, Pool, File)

Lawmakers in a growing number of states will face difficult budget choices next year as revenue growth slows, spending demands increase, and federal tax cuts and cost-shifts kick in. 

Fiscal analysts are projecting significant deficits in states such as California, Colorado, Idaho, Illinois, Maryland and Nebraska for Fiscal Year 2027, which for most states starts on July 1. In other states, such as Minnesota and Virginia, they are eyeing budget problems in future years. 

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