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SSMMA Mayors Concerned with Governor Pritzker’s Budget Proposal to Eliminate Grocery Tax

On February 26th, Governor Pritzker in his State of the State and Budget Address proposed that Illinois take steps to permanently eliminate the 1% sales tax on groceries which are collected from grocery receipts by the state, then transferred to local governments within each jurisdiction from which the taxes were raised. The cancellation of this tax would amount to an estimated loss of approximately $325 million statewide that directly impacts municipalities, including those in the Southland. 

 

Local mayors immediately questioned whether the Governor was also proposing a transfer of a like amount of General Revenue Funds to offset the loss as he did in 2022 when the state established its temporary Grocery Tax Holiday. The rationale then was to reduce the impact on household budgets but not reduce the level of revenues distributed to municipalities which would severely impact their ability to deliver essential services to residents and businesses. Unfortunately, the Governor has not proposed a revenue “swap” this time. In short, municipalities are being told they’ll have to figure out a way to do without, cut costs, or make it up another way.  

 

Here in the Southland, which is not “the land of plenty”, this means municipalities are again being told they will have to find a way to operate and provide services to constituents with less. Passing along the costs to taxpayers is a no-win situation. Many of the south suburbs have some of the highest tax burdens in the state and perhaps the country, which impacts the desirability of the community as a whole.  

 

With that backdrop, municipal leaders have been told they’ll now have to find a way to pay down escalating public safety pension obligations; deliver increasingly costly public services- snow removal, garbage pick up, road maintenance and public works activities, water, sewage, and more; address growing public safety needs and support current staff salaries, including police and fire personnel; tackle necessary public infrastructure projects- water, sewer, roads, bridges, broadband and other critical local projects—which was already extraordinarily difficult on limited budgets—with less.  

 

This is untenable. Mayors, Managers, Stakeholders: contact your legislators in the Illinois House of Representatives and Illinois Senate to let them know how a reduction in Grocery Tax revenues, without a commensurate amount of General Revenue Funds as replacement, is unconscionable to communities like those in the Southland that have faced historic inequity, divestment, job loss, high property taxes and poor collection rates. Southland communities should be made whole on any loss of revenues that impact municipal stability and local quality of life.


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