This browser does not support the Video element.
Plan to eliminate Illinois sales tax on groceries raises concerns
Under the plan, Illinois residents would save $1 for every $100 spent on groceries if the tax is eliminated.
CHICAGO - Governor JB Pritzker's proposal to eliminate the sales tax on groceries received praise from some lawmakers during his State of the State address last month, but concerns over the potential fallout for local municipalities have emerged.
Pritzker temporarily suspended the one-percent grocery tax as part of his 2022 budget, but now intends to permanently remove it. Under the plan, Illinois residents would save $1 for every $100 spent on groceries if the tax is eliminated.
While touted as a tax cut, mayors from several suburbs expressed apprehension during a press conference on Monday. They argued that between two and four percent of their budgets would immediately disappear, necessitating increases in taxes and fees to compensate for the lost revenue.
A bill filed two years ago aims to make the grocery tax cut permanent while requiring the state to backfill the lost revenue for local municipalities with an equal dollar amount.
Debby Sosine, Village President of Algonquin, emphasized the importance of the revenue generated from the grocery tax for essential services.
"If we lost the sales tax on groceries, it's $2 million dollars out of my budget. That goes to my general fund. Two-million pays for my police, it pays for my public works. It pays for water, sewer and infrastructure and roads," she said.
According to the Illinois Municipal League, if the grocery tax were eliminated, cities like Chicago would lose $80 million per year in revenue.