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Pritzker says he took GOP advice to eliminate grocery tax

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(The Center Square) – Illinois Gov. J.B. Pritzker says he’s taking a cue from Republicans in pushing to eliminate the state’s 1% grocery tax. Republicans say their plan would make local governments whole.

The second-term Democratic governor proposed eliminating the tax during his State of the State speech last month. Municipalities criticized the move, saying they could be out of $325 million in tax revenue if the proposal passes.

“You may recall two years ago when the state enacted a suspension of the same grocery tax, but retailers were required to continue to report their sales and the state made corresponding transfers from the state’s General Revenue Fund to municipalities, so there was no lost revenue based on actual grocery sales,” the Illinois Municipal League said in a memorandum to mayors across the state. “This latest proposal from the Governor does not include the transfer from the state to municipalities.”

Pritzker repeated his response Tuesday at an unrelated event, saying local governments could implement their own sales tax if they wanted.

“But this is about local control and also eliminating a regressive tax on everyone in Illinois but especially those who are disadvantaged and often left out and left behind,” Pritzker said at an unrelated news conference Tuesday in Morton.

State Sen. Jason Plummer, R-Edwardsville, was surprised the governor supports local control.

“It’s the first time that I’ve ever heard Gov. Pritzker in support of any sort of local control. He seems to control all of the decisions from Springfield,” Plummer told The Center Square.

Plummer said at the end of the day, it’s the governor’s proposed increased spending based on other regressive taxes or one-time money that’s the problem.

To the idea that municipalities may have to increase local taxes if they lose the grocery tax, Pritzker pointed fingers at Republicans who criticized the one-year suspension of the tax in fiscal year 2022 saying it should be permanent.

“And I thought about it for a long time and thought, ‘yeah, this is the most regressive tax, the tax on food, and we should eliminate it,’ and frankly I took their advice,” Pritzker said.

Republicans have a measure to eliminate the grocery tax, but they say their proposals would backfill the lost revenue to local governments by ending sweeps from the Local Government Distributive Fund. State Sen. Don DeWitte, R-St. Charles, has Senate Bill 3725 which would eliminate the grocery tax, but provide certain amounts to be transferred from the state’s General Revenue Fund to certain local tax funds.

Pritzker said he’s willing to have conversations with local officials about how to replace that revenue.

“But the reality is I put $1.3 billion of state money more than in past years into local hands and that’s on top of billions of dollars that the state already sends to local governments,” Pritzker said.

Plummer said Pritzker should stop playing politics with local governments.

“If the governor wants to give them [local governments] relief, we need to look at getting rid of a lot of the mandates we’ve put on them from law enforcement training to everything else, because the small communities in my district simply can’t afford Springfield, Illinois,” Plummer said.

The next budget year begins July 1. Legislators return for session Wednesday.