As budget talks take a serious tone in Springfield, one of Gov. J.B. Pritzker’s big promises has been to eliminate the state's grocery tax. But that money is designated for municipalities and there’s concern that without those funds a hole will form in local budgets.
Pritzker called for the tax's removal during his budget address in Springfield earlier this year, with the governor saying the proposed elimination would be a boost for families still hit hard by increasing prices. Pritzker blasted the 1% tax as a “regressive tax” that the state doesn’t need.
“If it reduces inflation for families from 4% to 3%, even if it only puts a few hundred bucks back in families’ pockets, it’s the right thing to do,” he said.
More than a dozen states currently tax groceries, and while Pritzker's desire to rid Illinois of the tax has plenty of consumer approval, the state’s current tax adds up to significant revenue for local municipalities.
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For example, the Illinois Municipal League notes that Chicago will lose $80 million, Joliet will lose $3 million and Orland Park will lose $2.5 million.
"We intend to provide, in the legislation, the ability for communities to reimpose that tax if they want to," Pritzker said. "I would not suggest it. I think it’s not proper to be taxing food.”
If local towns want to impose a grocery tax, current Illinois law states home rule communities - or counties, towns or cities with more than 25,000 people - are permitted to do so.
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The 1% tax on groceries applies specifically to items that are meant to “be consumed off the premises where they are sold,” according to state law.
The sales tax was suspended as part of Pritzker’s Fiscal Year 2022 budget, with officials projecting that it could save shoppers up to $400 million.
The measure still needs to go before lawmakers, and it is unclear if it will pass.
"I’m all for it," said Republican House Minority Leader Toni McCombie. "I think it’s great, except for it has to be backfilled.”
As the Illinois General Assembly budget hearings turn more substantive, McCombie had another suggestion.
“Let’s get rid of the double tax on Illinois gas," McCombie said. "Nobody seems to talk about that. So, I think there’s a better way. If the governor wants to, or his team want to talk about real tax reform, ways we grow our tax base instead of our tax rate – Illinois Republicans are in for those conversations.”
