Northwest Herald

Guest column: Grocery tax repeal is not a ‘win’ for taxpayers, state Sen. Don DeWitte writes

During his recent combined State of the State and Budget Address, Gov. Pritzker received rousing applause when he announced it was time to permanently eliminate Illinois’ 1% sales tax on groceries. However, as is always the case with policy proposals coming out of Springfield, the devil is in the details.

On its surface, what could be better? Tax relief is a great idea for Illinoisans who are paying record-high prices at the grocery store. Every step that can be taken helps lighten the load for struggling families.

In reality, what the governor proposed is simply a tax swap – he wants to provide the illusion of tax relief, when all he is doing is forcing local governments to raise taxes. It is not a “win” when the net benefit to taxpayers is zero.

The Local Government Distributive Fund (LGDF) allows local governments to have 10% of the locally-generated sales taxes returned to them. Over time, however, Governors began sweeping some of the funds away and using the money for other purposes. Today, municipalities only receive 6.47% of the LGDF funds they are owed.

The grocery tax generates about $350 million per year in revenue, and the Governor’s proposal forces communities to backfill the lost revenue. According to data compiled by the Illinois Municipal League, the Village of Sugar Grove would face an approximate $200,000 loss, and Elburn would lose about $119,000. Algonquin would lose about $1.1 million in funding, and the cities of Crystal Lake and St. Charles would lose approximately $1.3 million and $1.6 million respectively. For Chicago, the lost revenue would be more than $73 million.

I have legislation pending in Springfield that would eliminate the grocery tax and protect municipalities from revenue losses. Through my Senate Bill 3725, the grocery tax would be eliminated, and lost revenue would be backfilled by funds that have routinely been swept in recent years and redirected for other budgetary purposes.

I actually spoke with Governor Pritzker about this policy proposal last spring, and at the time he expressed interest in my legislative idea. Unfortunately, when he claimed the idea as his own during his speech, it became clear that that he was not interested in making sure municipalities did not have to scramble to fill the revenue gap they would face.

When questioned about his grocery tax proposal, Governor Pritzker flippantly said municipalities could just raise local taxes if they wanted to. His cold response was a stark departure from the rhetoric he used when he was seeking reelection in 2022. Still in the midst of the COVID response, he expressed concern over how losses of sales tax revenue were impacting municipalities, and decided to use federal pandemic relief funds to help backfill the hole. My, how things change.

Eliminating the grocery tax does not need to devastate our local community budgets. There is a way to provide tax relief while protecting our cities and villages from huge funding losses, and my hope is that every legislator with a vote at the Statehouse recognizes that the Governor’s plan hurts the constituents and the municipalities they are elected to represent.

Illinois Sen. Don DeWitte is a Republican from St. Charles; he represents the 33rd District covering parts of Kane and McHenry counties.