A new Illinois law should alleviate some of the financial stress of back-to-school shopping, lowering the tax rate on some school-related items for a limited time before children return to the classroom.
Senate Bill 157 lowers the tax rate on clothes and school supplies from 6.25% to 1.25% for 10-days from Aug. 5-14, according to State Sen. Rachelle Crowe.
“As a nod to our working parents, guardians and teachers in Illinois, lowering the tax rate on school supplies removes a burden when preparing for the academic year,” Crowe said. “It is my hope that by instituting a tax holiday, we can help relieve families and educators of some financial costs in order to prepare students for the upcoming school year.”
The new law goes into effect immediately.
On Tuesday morning, Gov. J.B. Pritzker signed a $46.5 billion budget that includes $1.8 billion in election-year tax relief and a $1 billion deposit into the state's rainy day fund.
“The budget I’m signing into law today brings real improvements to the lives of working families and sets us up for a stronger fiscal future,” Pritzker said in a statement. “Investments in stronger schools, modernized airports and newly paved highways, hundreds of thousands of well-paying infrastructure jobs, and a better funded pension system… these are the kind of priorities we can invest in when our state is governed responsibly.”
The budget plan goes into effect on July 1, the start of the state’s fiscal year.
Illinois lawmakers approved the budget, which also puts $1 billion into a state “rainy day” fund, earlier this month. The Illinois Senate approved the budget plan on a 34-19 vote, while the House gave its approval on a 72-42 vote.
“We are continuing our practice of responsible budgeting while helping those who need help the most,” Illinois Senate President Don Harmon said in a statement. “Families are struggling, and I hope this budget provides them a bit of relief.”
The budget relies on a robust post-pandemic economy and health tax revenues to include $1.8 billion in mostly temporary tax cuts that track closely with Pritzker’s election year proposal last winter.
The plan includes a direct payment to Illinois residents making less than $200,000 per year or $400,000 per year for couples filing jointly. Each taxpayer would receive $50, plus $100 for each dependent child, capped at three.
It also includes Democratic legislative leaders’ response to soaring prices with temporary tax breaks on gas, groceries and real estate levies, and also includes a permanent expansion of a tax credit for low- and moderate-income taxpayers.
The budget also includes more than $200 million for new public safety initiatives that answer Republican criticism that Democrats were not doing enough to address rising crime.