While visiting Peoria, Gov. JB Pritzker stood firm that ending the Illinois grocery tax was the right move for the state, despite concerns about the financial impact.
In February, city leaders said the end of the state’s 1% grocery tax could have negative consequences on Peoria and other municipalities in Illinois. The tax ends in 2026.
Pritzker said Thursday it was up to municipalities to make their own decisions on how to move forward without the grocery tax revenue. He said lowering taxes on food is "one of the most important things you can do." He said he would recommend that communities implement something that isn’t as "regressive."
"It was the most regressive tax you could possibly have, taxing people on food," Pritzker said. "Wealthy people, middle class people can afford to go to the grocery store and pay 1%. Everybody else it’s hard. That’s one of the reasons I went after it."
Peoria leaders said in February that the city would lose $4 million annually when the tax ended.
Peoria Mayor Rita Ali, who was in attendance for Pritzker’s appearance at the CJ Harvest grocery store in Peoria on Thursday, had said in February that ending the tax would have "unintended consequences."
"This I believe is the unintended consequences of what was deemed to be a break, something good for the residents of Illinois, without fully understanding the impact that it has on municipalities, cities across the state of Illinois like ours," Ali said in February. "We would not have anticipated a $4 million annual loss moving forward from 2024 and really the damage it could cause to services because it would mean significant, deep cuts."
Ali told the Journal Star on Friday that she is still concerned with how the loss of $4 million annually will impact Peoria. She said city leaders and staff will spend the next year coming up with a plan to make up for the loss.
To that end, Ali said "everything is on the table" to make up for the lost revenue, including the implementation of a local grocery tax.
"It would have an impact of about $4 million per year and that would be a significant reduction in resources meaning staffing, so that means a reduction in services," Ali said. "I am very concerned about it and it is something that over this next year we will have to study more and talk about more, discuss more and ultimately we will have to make a decision about how to move forward for Peoria."
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City Manager Patrick Urich declined to comment for this story. In February, he called the end of the grocery tax a "concern." City Finance Director Kyle Cratty told the council in February that the $4 million hole created by the tax’s end was larger than 10 city departments.
Prior to ending the grocery tax, which added a 1% charge to every grocery store receipt in the state, Illinois was one of just 13 states with a grocery tax. Pritzker called that "kind of embarrassing."
"Illinois should not be last or near the end of the line, we should be first in line to get the right thing done for the people of the state," Pritzker said. "So that’s why we wanted to get it done. I think it helps everybody across the state."
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Pritzker said he understands that some municipalities may choose to reimpose their own grocery taxes in lieu of the state tax but reiterated that was a local decision now.
"There are a lot of people who go around and say ‘gee we really need to lower taxes, we really need to lower taxes, why aren’t we lowering taxes,’ and then the minute you lower a tax they’re like ‘wait we can’t live without that one’ so I just want you to know that people will complain no matter what we do," Pritzker said. "I think lowering taxes and letting municipalities make decisions for themselves…I understand it’s always a challenge to figure out how we’re going to pay for things but leaning on groceries to do it, for me anyway, it doesn’t make a lot of sense."
