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What’s Ahead for 2026:

Federal and Illinois Policy Updates

December 15, 2025

Webinar co-hosted by The Health and Human Service Coalition of Illinois, Responsible Budget Coalition, and Living Wages, Thriving Communities Campaign

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Agenda

Federal Updates - Holly Ambuehl, Forefront

Updates on Veto Session and Looking ahead to 2026 - Niyah Kelly, Chicago Coalition to End Homelessness

Updates on Living Wages, Thriving Communities Campaign - Cosette Ayele and Adela Carlin, Illinois Partners for Human Service

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Who we are

Health and Human Service Coalition

Responsible Budget Coalition

Living Wages, Thriving Communities Campaign

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Federal Updates

Executive Actions

218 Ex Orders since inauguration
>30 EOs directly affect nonprofit sector
543 lawsuits
Key concern: “domestic terrorism” memoranda

240 EOs in his entire first term
10 cases closed in favor of government
Trump signed a presidential memoranda directing federal agencies to investigate, prosecute, and disrupt nonprofit organizations the Administration claims are supporting or funding domestic terrorism
The memoranda was signed after months of escalating, dangerous rhetoric by the President and senior White House officials denigrating nonprofits, portraying them as “enemies” of the American people, and falsely accusing nonprofits of fueling radicalization and political violence without providing evidence of wrongdoing
It was signed the same day as reports that the President directed the U.S. Department of Justice (DOJ) to launch a baseless criminal investigation into the Open Society Foundation, an unprecedented and direct assault on the nonprofit sector.
In response, over a 150 philanthropic organizations signed an open letter defending the philanthropic sector
Attempts to target nonprofits serving immigrants, advancing racial equity, and supporting the LGBT community
Without evidence, the Administration claims domestic terrorism is driven by “extremism on migration, race and gender.”

EO Trackers:

https://www.presidency.ucsb.edu/statistics/data/executive-orders
National Council of Nonprofits’ Tracker: https://www.councilofnonprofits.org/files/media/documents/2025/chart-executive-orders.pdf

Just Security Litigation Tracker: https://www.justsecurity.org/107087/tracker-litigation-legal-challenges-trump-administration/

9/29 Ex Order re: domestic terror: https://www.whitehouse.gov/presidential-actions/2025/09/countering-domestic-terrorism-and-organized-political-violence/

Open Letter from Philanthropic Orgs: https://medium.com/@uniteinadvance/statement-on-the-fundamental-freedom-of-speech-b98c1c6db4e2

Democracy Forward Resources: https://www.democracy2025.org/responding-to-threats

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Federal Updates

Executive/Congressional Funding Cuts

Recissions: Public media (including rural IL); international aid
HR1: Forefront and others have detailed analysis
Shutdown: ACA credits huge concern; another shutdown likely
Contract Cuts and Cancellations:
Urban Institute Report: 1/3rd nonprofits reported 1+ government funding disruption
~$181M known permanent cuts tracked in IL (excluding higher ed)
Highly competitive private grant environment, with large NPOs that lose federal funding applying for more private funding

Federal government making spending cuts using a variety of mechanisms
Recissions
HR1

Increased Costs: $935M for SNAP, $52B in lost Medicaid funding over next decade

Contract Cuts/Cancellations

Known exs: DOJ grants, Public health programs, Housing programs, Local food purchasing programs, Higher Ed, Early termination of ARPA funded programs, Environmental [capital] projects

All together, a recent report from IL Economic Policy Institute found that by 2029, federal funding cuts and freezes will cost Illinois $8 billion annually,
And that by 2029, the scheduled end of the second Trump administration, these federal actions will shrink Illinois’ economy by $10 billion, reduce employment by 86,000 jobs, and cause State tax collections to decline by $540 million annually in addition to $730 million in lost corporate income tax revenue.
Illinois is already a federal donor state, meaning that our state contributes more toward federal taxes than it receives in federal expenditures and investments.
The state ranks 46th nationally in return per tax dollar and receives between $6 billion and $38 billion less annually than neighboring states.
Recent federal cuts and spending freezes will put Illinois even further behind and penalize the state for promoting public policies that create high wages, a better- educated workforce, and lower levels of poverty.

HR 1 Analysis: https://myforefront.org/articles/hr1impact/
Pew Research on States’ Responses: https://www.pew.org/en/research-and-analysis/articles/2025/11/24/how-states-are-assessing-the-impact-of-federal-policy-changes
IL Economic Policy Institute Report: https://capitolnewsillinois.com/wp-content/uploads/2025/11/IEPI-federal-funding-cut-report-12.1.25.pdf

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Federal Updates: Response

Funders

Increasing payouts, reducing reporting requirements, creating new pooled/rapid response funds, legal strategy

Forefront

Regular Member Briefings
Legal Resources
Nonprofit Resilience Hub Early ‘26

Operating Nonprofits

Seeking support for policy work, communications, legal defense, safety for staff/clients
Cutting back on services
Pausing planned expansions
Using reserves earlier than intended
Hiring freezes
Planning for higher health costs overall as folks lose coverage

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Federal Updates: What to Expect in ‘26

Congressional Action

Another shutdown likely
ACA Tax Credit Extension debate will extend into 2026
Key Opportunities

Freedom to Give Act
Nonprofit Employer Tax Fairness
Census 2030 Ramp-up

SCOTUS

Birthright Citizenship
Voting Rights Act

Midterm Elections

Impacted by mid-cycle redistricting efforts
Spring Primaries
Fall General

SHUTDOWN / ACA

Another shutdown is likely at the end of January, since they haven’t enacted all of the full year funding bills, and the agreements established in the fall shutdown expire at the end of January.
But, although a shutdown is likely, and although Congress and Trump can’t agree on ACA and health care, the House did overwhelmingly pass a $900B (with a B) funding bill this week for Defense with a strong bipartisan vote.
The defense bill is expected to pass the Senate this week.
Senate Republicans haven’t achieved consensus within their own Caucus; some are in favor of extending enhanced ACA subsidies or replacing them with new frameworks, while others prefer to scrap the program and replace it with something else.
The U.S. Senate voted yesterday on two partisan health bills, one proposed by Democrats that would have extended ACA tax credits for the next 3 years on which 4 Rs voted yes, and one proposed by Republicans which would have added between $1,000-1500 to health savings accounts for those earning less than 700% of the FPL (which is about $78,000 for a single person).
This would give those with a deductible of $7500 only $1,000 or $1,500 to cover OOP costs, depending on their age, with those over 50 getting the higher amount.
Both the R and D proposals failed to pass the upper chamber, falling short of the 60 votes needed.
So, as of now, this debate will extend into the new year, and the credits are expiring, and there are not enough session days left in the calendar year for a new bill to pass both chambers.
By way of comparison, the cost of extending the ACA tax credits is about $350 billion over 10 years.
In contrast, the cost of the tax cuts in HR1 was over $4 trillion over 10 years.

National Council of Nonprofits’ Guide on Shutdown for nonprofits: https://www.councilofnonprofits.org/articles/government-shutdown-what-should-nonprofits-do
This morning in Politico re: health care debate: https://www.politico.com/news/2025/12/15/gop-obamacare-message-muddled-00690145

OTHER KEY AGENDA ITEMS

Forefront’s IL Count Me In 2020 Census Summary: https://myforefront.org/wp-content/uploads/2021/02/IL-Count-Me-In-2020-Executive-Summary-2.24.21.pdf
LUCA Resource Guide for Stakeholders: https://censusroadmap.org/wp-content/uploads/2025/06/LUCA-guide_FINAL_20250613.pdf
CLCCR op-ed: https://indianacapitalchronicle.com/2025/12/10/counting-every-hoosier-isnt-optional-its-the-law/

SCOTUS

The Supreme Court agreed this week to hear arguments on President Trump’s executive order to ban birthright citizenship in early in 2026.
Birthright citizenship was added to the US Constitution in 1868 in the aftermath of the Civil War.
The President’s executive order forbids government agencies from issuing citizenship to persons born when their parents are in the country without documentation or are here temporarily.
SCOTUS hasn’t set a date yet for these arguments yet, but most are expecting spring 2026.
Additionally, a decision is expected this year in Louisiana vs. Callais, which centers on Section 2 of the Voting Rights Act, the key provision of the law that broadly prohibits discrimination in voting practices on the basis of race or creed.
For decades, Section 2 has been understood to require some legislative districts where minority voters have a “meaningful” opportunity to elect their preferred candidates.
In practice, that often means districts where racial minorities make up at least half the population.
But some conservatives say any race-conscious redistricting violates both the 14th Amendment’s equal protection clause, which generally prohibits the government from discriminating on the basis of race, and the 15th Amendment, which says the right to vote cannot be abridged on account of race.
They also say the practice relies on outdated stereotypes about the political preferences of minority voters.

1/20/25 Executive Order: https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-meaning-and-value-of-american-citizenship/
SCOTUSBlog: Birthright Citizenship Oral Arguments 2026: https://www.scotusblog.com/2025/12/supreme-court-agrees-to-hear-trumps-challenge-to-birthright-citizenship/
Politico: Supreme Court to rule on Birthright citizenship: https://www.politico.com/news/2025/12/05/supreme-court-trump-birthright-citizenship-00678828
SCOTUSBlog: Louisiana v. Callais VRA Section 2: https://www.scotusblog.com/cases/case-files/louisiana-v-callais-2/
Politico re: Voting Rights Act Case: https://www.politico.com/news/2025/10/15/supreme-court-voting-rights-act-argument-00608340

MIDTERM ELECTIONS AND REDISTRICTING

While SCOTUS’s ruling on the Voting Rights Case is likely to undo Section 2 in some shape or form, and impact the drawing of congressional district lines, it’s unclear if that can or will happen in time to impact districts for the primary elections in March or the general election in November.
Meanwhile, other factors will also come into play in terms of impacting the balance of power in DC following this year’s elections.
Some Republican House and Senate members in D.C. are starting to break from the White House and show inklings of wanting to exert Congressional independence from the executive branch.
Some key recent examples include calls for investigations over the Pentagon carrying out military strikes without Congressional approval, closer examination of the economic impacts of imposing tariffs, and as we mentioned earlier, even on the various approaches proposed to the ACA tax extensions.
This increasing willingness to defy Trump is also happening more at the local level.
Specifically, last week,, the Indiana state Senate rejected on a strong bipartisan basis a proposal to redistrict the state’s Congressional lines, which would have given every seat in the state to Republicans had it passed.
More Rs voted against it in the Senate than for it, despite the fact that the Heritage Foundation told IN leaders that the White House would withhold all federal funding from the state if they didn’t pass it.
Leading up to the Indiana vote, our colleagues at Chicago Lawyers Committee for Civil Rights, who, despite their name, operate not just statewide but also in Indiana, successfully published an op-ed that artfully connects the dots between the mid-cycle redistricting effort and attempts to add a citizenship question, or otherwise exclude non-citizens, from the decennial Census.
Governor Pritzker reaffirmed previous comments last week that Illinois would only redistrict if Indiana passed new maps.
So, based on last week’s vote in Indiana, it’s unlikely an attempt to redistrict will occur in Illinois.
Sebastian has updated his memo summarizing the mid-cycle redistricting efforts around the US, and we will put that in chat for those that want to understand more.
The Rs need to net 10 seats in the House with these efforts to hang onto the majority after the mid-terms.
In contrast, Ds only need to pick up three seats.
However, what SCOTUS decides on the VRA case will impact either party’s ability to pick up new seats.

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Federal Updates: What to Expect in ‘26

Implications for Nonprofit Employers

Increased cost of healthcare coverage for employees
Increased demand on front-line/direct service staff's time to support clients' compliance with work requirements and other documentation
Increased demand for services (e.g., free health clinics, free and charitable hospital care, food pantries, etc.)
Increased demand for private philanthropic dollars
More competition among grantees seeking support

Ballot questions/election results will impact our work
Major pressure on state budget
Cuts likely without new revenue

9 of 20

Veto Session Updates

Immigration
Transit
Decoupling
Medical Aid in Dying

courthouses, hospitals, child care centers, universities and colleges, while also allowing individuals to sue immigration officers for knowingly violating the state or US Constitution during civil immigration enforcement.
This legislation creates NITA (Northern Illinois Transit Authority). It provides $1.5 BILLION in new dollars into public transit system. The revenue package includes an increase in tolls, transferring money from the road fund to transit (some may have heard about the roadway lockbox), and an expected increase in the sales tax voted on by RTA or the new board.
HR1 (Big Beautiful Bill) gives numerous new tax deductions, largely to corporations. Because IL's tax code generally follows the federal tax code, if IL did not "decouple" from the federal provisions, the state would lose hundreds of millions of dollars in tax revenue. The legislation decouples from SOME of the provisions, we are unsure if they will do more in the spring.
this legislation allows terminally ill adults with a prognosis of six months or less to live the option of obtaining a prescription medication that they can decide to take so that they can die on their own terms. This bill was also strongly opposed by disability groups, and the bill got the minimum votes needed to pass the Senate after passing the House in the Spring.

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What to expect in Springfield in 2026

Budget
Revenue
Elections
Federal Policy
Legislative Work

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About the Living Wages,

Thriving Communities Campaign

Living Wages, Thriving Communities is advocating for increased state funding for human services and pushing for wage increases for workers in the sector in Illinois. We engage frontline workers, human services organizations, coalition partners, legislators, and the public to push the State to responsibly invest in the well-being of all Illinoisans by fairly funding the health and human services workforce.

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Campaign Goals for 2026

PUSH for equitable, sustained state funding that ensures thriving wages for human service workers and addresses long-standing systemic inequities

Create opportunities for frontline workers to engage in advocacy and share their stories

Grow the campaign’s depth and reach by expanding the number of endorsers, supporters, and emerging leaders

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Impact in 2025

330 awardees supported with up to $20,000 in student loan repayment.

Human Services Professional Loan Repayment Program

$4.3 M out of the door from ISAC to pay down student loan debt

53.6% of applicants identify as Black, Brown, or People of Color.

“Many employees within Human Services do not see the point in earning a degree if they will only accrue more debt, and at some point will have to accept that they may very well go to their deathbed with unforgiven and unpaid loans.” – Katie K.

We’re changing this reality.

Living Wages, Thriving Communities Resolution Passed

A 79-34 vote among House legislators passed the LWTC Resolution, to prepare the State to make

a commitment to better funding the human services workforce.

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Human Services Workforce Sustainability Act

Purpose: Ensures sustained, inflation-adjusted investment in human services by setting baseline grant funding levels and mandating annual increases.

Senate Chief Sponsor: Senator Graciela Guzman

House Chief Sponsor: State Representative Yolanda Morris

Establishes Minimum Grant Levels:

In FY2027, grants must be at least the FY2026 level and no less than FY2021 levels

plus 25% (to account for inflation and cost-of-living).

From FY2028 onward, annual increases are tied to the greater of 3% or the Consumer Price Index (CPI).

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Human Services Workforce Sustainability Act

(ctd.)

Oversight Enforced:

This Act requires the hiring of a Director of Human Services Wage Equity to be housed in the Department of Central Management Services (CMS) to:

Ensure the Act is implemented in both the current and future fiscal years, and
Support State Agencies in identifying the level of necessary funding needed to satisfy the minimum grant levels established by this Act.

Use of Funds: At least 70% of new funding allocated by this Act is required to be used for improving wages and benefits of workers at qualified human service organizations.

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Human Services Equitable Pay Task Force

Purpose: Creates a state-recognized taskforce (or commission) within the IL Department of Human Services (IDHS) to inform policy and funding decisions that promote equitable pay in human services and strengthen the human service workforce. The Task Force is made up of the following representatives:

Statewide organizations representing human service providers,
A human service provider based in a rural area in IL,
A representative of a trade or labor union representing professionals employed by human service providers,
Representatives of human service providers with annual budgets $10M or higher,
Representatives of human service providers with annual budgets under $10M, and
Frontline human service professionals

House Chief Sponsor: State Representative Lilian Jimenez

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Opportunities to Engage in 2026

Join the Strategy Committee

Special invitation for Frontline Workers!

Meetings are twice a month on Mondays at 4 PM via Zoom.

Press Conference

Small Group Advocacy Days in Springfield

Endorse the Campaign

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Living Wages, Thriving Communities

Strategy Committee

To lead a campaign rooted in our partners’ perspectives, we formed a strategy committee of human service professionals spanning a variety of roles (frontline workers, directors of large and small organizations, policy experts, and trade association leaders) who make key decisions about the campaign's trajectory. This committee meets regularly, and all meetings are virtual.

We welcome new members as we plan for the next legislative session. Please reach out if you are interested in joining!

Please share or connect us with frontline workers who may be interested in joining!

Co-leaders: Cosette Ayele & Adela Carlin

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Advocacy Training Series

Building Power in Human Services:

Advocacy in Action

Session Dates

January 12: Introduction to Advocacy

January 20: Developing Advocacy Strategy & and Galvanizing Support

January 26 : School House Rock for Illinois

February 2: Lessons from Illinois Advocates

Join us!

This Advocacy Training is designed for human service professionals to gain knowledge, strategies, and skills for state-level advocacy!

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Thank you!

Visit Living Wages, Thriving Communities Website: livingwageil.org

Contact lauren@illinoispartners.org

Please spread the word and share in your own networks.