Illinois Gov. J.B. Pritzker released his proposed FY 2025 budget on Wednesday, which would permanently eliminate the state’s 1% tax on groceries.
“And even though inflation continues to cool off, folks are still feeling the squeeze every week at the grocery store,” Pritzker said in a press release, adding that cutting the tax is “for the good of our state’s working families…”
“It’s one more regressive tax we just don’t need. If it reduces inflation for families from 4% to 3%, even if it only puts a few hundred bucks back in families’ pockets, it’s the right thing to do,” Pritzker said.
The proposal comes less than a year after the tax was reinstated last July. The reinstatement came after a year-long suspension that was aimed at providing relief to those struggling with higher inflation.
As of June of last year, Illinois was one of only 13 states nationwide to impose a tax on grocery purchases. Illinois’ 1% tax was the smallest at the time, compared to Mississippi at 7%; Kansas at 6.5%; Idaho at 6%; South Dakota and Oklahoma at 4.5%; Tennessee, Alabama, and Hawaii at 4%; Virginia at 2.5%; Utah at 1.75%; Arkansas at 1.5%; and Missouri at 1.23%.
The consumer price index for groceries ended January up 3.1% year over year, down slightly from the 3.4% 12-month increase recorded in January, according to the U.S. Bureau of Labor Statistics.
The Illinois Policy Institute, a conservative think tank that advocates for lowering taxes, celebrated the budget proposal, noting that a poll conducted in June of 2023 showed that 70% of 800 poll respondents in the state support eliminating the grocery tax.
“Taxing essentials such as groceries falls hardest on low-income families. Illinoisans saved an estimated $360 million from a one-year suspension alone,” the group said in a blog post.