(The Center Square) – Illinois legislators continue to consider tax increases on businesses heading into the final nine days of scheduled session. Conversations also continue about zeroing out Illinois’ grocery tax and whether local governments will get state taxpayer funds to offset losses to local coffers.
Last week, Gov. J.B. Pritzker’s office told state agencies his proposed $1 billion in tax increases aren’t popular and to prepare for $800 million in cuts. Monday, Pritzker reiterated his position.
“It’s really up to the legislature at that point to make decisions about whether they like what was in that original budget, what they might want to change,” Pritzker said.
Among the tax increases proposed was a cap on the discount retailers get for collecting and remitting taxes back to state and local governments. House Bill 5844 from state Rep. Will Guzzardi, D-Chicago, is similar to Pritzker’s proposal but increases the percentage of the discount while lowering the cap to $500 a month. Guzzardi said other states have harsher caps.
Illinois Retail Merchants Association's Rob Karr said Illinois can’t compare with other states.
“Illinois has the most taxable jurisdictions in the nation and the most overlapping jurisdictions in the nation, all at different tax rates, all at which the Illinois retailer is the one that has to police,” Karr told a House Revenue and Finance Committee late Tuesday.
Another part of Pritzker’s proposed budget was to get rid of the state’s 1% grocery tax. The state suspended the tax in the fiscal year 2023 budget because of record inflation under the Biden administration, but offset lost revenue for local governments with state taxpayer funds. Pritzker’s proposal for fiscal 2025 doesn’t include that offset.
Illinois Municipal League’s Brad Cole said a measure from state Rep. Ryan Spain, R-Peoria, would allow for lost local revenue to be offset with state dollars, but there’s an estimated $325 million cost.
“This bill fills that void with general revenue funds from the state and I think the issue is whether or not the state wants to do that,” Cole said.
For the overall budget, state Sen. Don DeWitte, R-St. Charles, said Republicans are part of ongoing negotiations, but time will tell if they add their votes to the budget.
“This eventually evolves into a meeting between the governor and the four legislative leaders,” DeWitte said. “That’s where the rubber meets the road with regards to a final budget package that’s presented to the legislature.”
Legislators are scheduled to adjourn May 24. They have until May 31 to pass a balanced budget with simple majorities.
