Question of the day
Monday, Mar 4, 2024 - Posted by Rich Miller
* Cathy Griffith at the Effingham Daily News on the governor’s proposal to repeal the 1 percent grocery tax, all proceeds of which go to local governments…
Now Pritzker is calling for a permanent repeal of the tax without compensation to local governments, which legislators like Rep. Blaine Wilhour, R-Beecher City, support.
“I said at the time he put a temporary stop to the sales tax on groceries that we should have stopped it permanently,” Wilhour said. “The penny tax on groceries is punitive for working families, and we should end it in Illinois.”
Rep. Brad Halbrook, R-Shelbyville, also supports doing away with the tax but only with compensation.
“He is taking away millions of dollars from local towns, which will need to raise that money in other ways, mostly through an increase in local sales or property taxes,” said Halbrook in his emailed newsletter.
Not mentioned by Rep. Halbrook is that the General Assembly could vote to allow local governments to impose their own grocery taxes…
When it comes to saving municipalities’ finances from the budget hit they would take if the grocery tax is wiped out, Pritzker said his as-yet-to-be-formally-introduced plan has another component: giving municipalities the option to impose their own sales tax on groceries.
“If they want to impose a grocery tax on their local residents, they should be able to go do that,” he said. “I don’t think it’s the right thing to do, I wouldn’t do it locally. Having said that, I understand the need for the dollar, and if they feel like they need them they should think about imposing that tax on their own.”
The IML now says the tax raises about $325 million.
* The Question: Should the state budget reimburse municipalities for lost revenues from the tax’s elimination, or should local governments be given the ability to impose the tax on their own? Make sure to explain your answer. Thanks.
- Sad - Monday, Mar 4, 24 @ 11:45 am:
No to reimbursement, yes to allowing municipalities to impose their own grocery taxes.
If the local governments want the money, they can impose the tax themselves.
- very old soil - Monday, Mar 4, 24 @ 11:51 am:
What Sad said
- James - Monday, Mar 4, 24 @ 11:52 am:
State should reimburse for 3 years, then 50% reimbursement for 3 years, then zero out the reimbursement after that. This revenue means difference things to each municipality based on individual financial situations. Giving communities time to determine what gets cut from the budget, and what would need to be adopted in terms of tax increases to make due would be practical good government.
- Langhorne - Monday, Mar 4, 24 @ 11:57 am:
Leave it as is. The state is just putting the locals on the spot, if they remove the state tax but allow local replacement.
If the state provides reimbursement for the lost revenue, what do you do about community/economic growth? Or shrinkage? Will there be adjustments going forward?
- Odysseus - Monday, Mar 4, 24 @ 11:59 am:
Yes to allowing municipalities to impose their own grocery taxes.
No to reimbursement. If the state chooses to reimburse, that should phase out on a fairly quick timescale. Like 20-25% per year or more.
- Route 50 Corridor - Monday, Mar 4, 24 @ 12:01 pm:
Local municipalities should be allowed to raise their own tax in order to fill the gap. But it needs to be done quickly. Communities are headed toward the end of their budgeting process and I know of at least one that has froze all hiring, purchasing of equipment and projects until this has some type of a fix. And I would argue it needs to be done by the elected officials and not referendum for two reasons. By the time this is settled there will be roughly two months to get a referendum written and on the ballot, then properly supported. Besides people are notorious for wanting their cake and eating it too.
If this isn’t either stopped or fixed there will be a significant amount of cuts made at the local level.
For instance I know of one community that this makes up about 20% of the funds that are free to use in any line. If its gone that means fewer public safety positions, less road projects and fewer park improvements.
- DeeLay - Monday, Mar 4, 24 @ 12:16 pm:
Yes, municipalities should impose their own grocery taxes, although I can see that causing more issues in the long term.
I would give it a longer window for implementation so the state can end it and locals start at the same time (if they can act with a reasonable speed).
- JoanP - Monday, Mar 4, 24 @ 12:23 pm:
The state is just putting the locals on the spot, if they remove the state tax but allow local replacement.
The locals *should* be put on the spot. If they want the benefit of a grocery sales tax, they should own it.
- ArchPundit - Monday, Mar 4, 24 @ 12:25 pm:
I was going to say no reimbursement, but James’ idea seems like the best way to address it. Temporary reimbursement for stability and then ending the reimbursement as locals have time to make choices.
- Duck Duck Goose - Monday, Mar 4, 24 @ 12:26 pm:
It’s unfortunate that this is the tax in question. It’s going to cause a lot of consternation over so little actual benefit. Good tax policy is almost always to spread a low rate over a broad base. This allows the government to collect money without unduly burdening the taxpayers. This tax is the epitome of that. It collects significant sums while almost nobody even knows they’re paying it. Revising almost any other tax in the state would have more of an impact for taxpayers.
To the question: it will all depend on how the state plans on changing the law. Right now, the state prohibits locals from imposing their own tax. The utility of the local tax will depend entirely on how the state changes the law.
- Homebody - Monday, Mar 4, 24 @ 12:28 pm:
Possibly stupid question: previously how was the grocery tax remittance divided? Did the money go to where the taxes were generated (i.e. if you pay the tax in a Peoria store, the same money went back to Peoria)? Or was it just aggregated and split by population? Or something else entirely?
- Demoralized - Monday, Mar 4, 24 @ 12:29 pm:
No to reimbursement and yes to allowing them to raise their own tax. If they want the money from a grocery tax then let them make the argument that the tax is a good thing.
- Frida's boss - Monday, Mar 4, 24 @ 12:35 pm:
Yes take away the Home Rule restrictions on taxation and allow them to raise their own tax.
I would say if they keep complaining though let them do their own income tax as well.
- Donnie Elgin - Monday, Mar 4, 24 @ 12:35 pm:
yes
“If they want to impose a grocery tax on their local residents, they should be able to go do that,” he said. “I don’t think it’s the right thing to do, I wouldn’t do it”
So JB is against a tax that he reinstated just a year ago?
“New Developments
The previously enacted grocery tax suspension period concludes on June 30, 2023. Thus, beginning July 1, 2023, retailers should resume collection of the state 1% low rate on sales of groceries normally taxed at this rate. Also beginning July 1, 2023, retailers should remove the statement placed on any cash register tape, receipt, invoice, or sales ticket issued to customers, or posted on a sign that states “From July 1, 2022, through June 30, 2023, the State of Illinois sales tax on groceries is 0%.”
https://answerconnect.cch.com/docume
nt/jil0109013e2c83ac510f/state/explana
tions/illinois/food-and-grocery-items#:~:text=The%20previously%20enac
ted%20grocery%20tax,normally%20
taxed%20at%20this%20rate.
- Route 50 Corridor - Monday, Mar 4, 24 @ 12:39 pm:
Frida’s Boss
I’ll take that as being in jest. But why would not they be a little concerned by something that blows a hole in their budget, and then to be blindsided by it.
It is amazing to me we have gotten to the point where we don’t even consider reality when it comes to politics and policy. I can have my own very strong beliefs, but in the face of reality sometimes you have to give.
- Rich Miller - Monday, Mar 4, 24 @ 12:40 pm:
===So JB is against a tax that he reinstated just a year ago? ===
Yes.
- Demoralized - Monday, Mar 4, 24 @ 12:53 pm:
==but only with compensation==
Republicans gripe and moan about taxes in the state and then they gripe and moan when one is eliminated. Will the good representative be in favor of raising another revenue source at the state level to make up for the lost revenue at the local level? I’ve never seen such a bunch of hypocrites.
- Soccermom - Monday, Mar 4, 24 @ 12:57 pm:
I like James’ suggestion. But this does put municipal governments in a tough spot — it’s a fairly substantial political lift to reinstate the grocery tax. And it’s really not fair for municipalities to replace those dollars by increasing property taxes, given that a lot of grocery stores draw customers from outside the city limits.
Not sure why JB picked this issue?
- Route 50 Corridor - Monday, Mar 4, 24 @ 12:59 pm:
To make it very clear I am a Democrat. My concern is that this is going to be very disruptive to local government and that this is going to lead to cuts and those cuts always disproportionately affect the disadvantaged. This goes through and you will see cuts made in areas that will affect poor and lower middle class people the most.
- Ducky LaMoore - Monday, Mar 4, 24 @ 1:07 pm:
Just keep the dang tax. But if not, allow local governments to impose their own. In my mind, this is the second worst thing Pritzker has done (after pardoning the pyromaniac fire chief). It makes no sense and helps virtually nobody.
- BW - Monday, Mar 4, 24 @ 1:11 pm:
If it were a sincere effort to give a break to low income families, then JB wouldn’t have proposed holding back the exemption allowance from the scheduled adjusted rate with inflation. Instead it seems like he is needling the IML for their annual ask for an increase in LGDF.
- GoneFishing - Monday, Mar 4, 24 @ 1:23 pm:
No, the state shouldn’t be collecting a tax only for local governments. If they need it they should collect their own tax or live within their current taxes they already collect.
- flea - Monday, Mar 4, 24 @ 1:29 pm:
A guy can change his mind
- SOIL M - Monday, Mar 4, 24 @ 1:38 pm:
No to reimbursement and yes to allowing a local tax if they choose.
For those who say they want more local control, this is part of it. Don’t say you want less State control, but then reap rewards from it. If the monies being collected now are that vital to local government budgets, they should be collected locally.
- Mr. Math - Monday, Mar 4, 24 @ 1:54 pm:
This will be a logistical nightmare for both retailers and IDOR. Having to manage implementing, managing, and compliance monitoring literally thousands of different tax rates throughout the state will not well to say the least.
- Route 50 Corridor - Monday, Mar 4, 24 @ 1:57 pm:
SOIL M
It would be terribly cumbersome for businesses across the state to have locals collecting their sales tax. The state already has a standardized system and it makes it more streamlined. The only taxes municipalities collect locally is property tax and hotel/motel tax. And the cities do not collect their own property taxes of course, but the state does. The state already collects Business District sales tax and other sales taxes. It only makes sense they would continue to collect it.
- New Day - Monday, Mar 4, 24 @ 2:12 pm:
No. The GOP has been demagoguing issues like this for decades. Now they can’t blame it on Springfield. If they want the revenue, put on the big boy pants and tax your residents yourselves. Hard pressed to think why that’s a bad answer other than they prefer someone else take the heat for the taxes.
- Route 50 Corridor - Monday, Mar 4, 24 @ 2:23 pm:
New Day
I am saying the collections and reporting should still be done by the state, regardless of who places the tax, just like business districts and school facilities and any other number of sales taxes. Otherwise you would have literally thousands of different bodies collecting. That’s not efficent.
- Hank Sauer - Monday, Mar 4, 24 @ 2:46 pm:
Maybe JB Will require a sign to be posted at all grocery stores that he recinded the tax. It just reuse the gas station stickers
- 62629 - Monday, Mar 4, 24 @ 2:48 pm:
“And the cities do not collect their own property taxes of course, but the state does”
the state does NOT collect property taxes
- 62629 - Monday, Mar 4, 24 @ 2:54 pm:
Good catch, I meant to say the County that the city resides in.
- Route 50 Corridor - Monday, Mar 4, 24 @ 3:14 pm:
62629
Good catch, I meant to say the County that the city resides in.
- T.S. - Monday, Mar 4, 24 @ 3:48 pm:
Yes to allow local municipalities to implement their own grocery tax. No to supplementing the local municipalities with State Tax Dollars after decreasing local taxes. Pritzker will own cutting local taxes and allowing small government more oversight of how they tax local grocery stores.
- Tennessee Jed - Monday, Mar 4, 24 @ 3:56 pm:
Reimburse municipalities.
Some of these towns rely on this revenue to balance their budgets. Think about small local governments throughout the state that don’t have a whole lot of sales tax revenue but rely on the grocery cut. Would non-homerule municipalities be able to even implement a tax?!
You would be asking local leaders to implement a tax, right before 2025 when a good chunk of these local elected officials will be up for reelection. Political handcuffs on local government.
- Give Us Barabbas - Monday, Mar 4, 24 @ 4:01 pm:
Best offer would be a one year ramp to pulling it so their immediate budget is not ruined but if they don’t have the “ testicular fortitude “ to pass a local tax then they get what they deserve. If you’re too afraid of losing the job to do the job, you don’t deserve the job.
- sulla - Monday, Mar 4, 24 @ 4:14 pm:
Yes and Yes
What makes this a total D-move by the governor is the political pain he is needlessly inflicting on a thousand local governments over the elimination of a largely-forgotten tax…with no advanced notice given.
Those of us who work in or around local government are cringing at the ugly debates that will inevitably spring up among our councils on how to either balance this cut or institute a replacement tax.
And for what? Was there some massive public outcry over the penny grocery tax? No. Most people never saw or cared about it. As mentioned by someone above, ambivalence is an ideal response to taxation.
But, the Governor wanted a cheap talking point for the progressives. He got it. And now a whole bunch of muni staff, elected and appointed folks - through absolutely no fault of their own - are going to have to deal with the ugly fallout.
- OurMagician - Monday, Mar 4, 24 @ 5:00 pm:
No to reimbursement. Yes to allowing locals to continue.
But the emlimination should be phased in 2 years. Keep at 1% in FY25 and to .5% in FY26 to allow locals the time to either plan or reinstate in FY27
- Rabid - Monday, Mar 4, 24 @ 5:50 pm:
I’m with JB cutting taxes. Ok with locals raising taxes