Mt. VERNON, Ill. (WSIL)-- Recently Illinois lawmakers cut the grocery tax from the state's Fiscal year 2025 budget, but will be eliminated on January 1st, 2026.Â
The grocery tax is 1% on food, drugs, and medical appliances.
Some cities say getting rid of this tax will hurt their funding because that money goes directly back to them.
With the changes, some shoppers in Illinois could see changes to their grocery receipts. One person shopping at Sharps Foods in Mt. Vernon, Pam Shelter, says less tax is better.
“When you're retired and you're living on a fixed income, every little coupon helps,� Schelter said.
In February, Illinois Governor J.D. Pritzker sought to eliminate the grocery tax, he said the tax was regressive and that its elimination could save hundreds of dollars for a family across a year.
“I only shop when they absolutely have to. But I feel sorry for the families that are feeding a lot of kids and you know, it's just, those are expensive,� Schelter said.
However, some municipalities are not happy with the cuts. Mt. Vernon's Mayor John Lewis says the money from that tax goes back to their city budgets.
“None of it went to the state. So it was kind of like the state was able to get positive attention by eliminating this tax while they didn't experience any of the downside,� Mayor Lewis said.
Lewis says most municipalities, not just those in Southern Illinois will be affected by this.
“Mt. Vernon alone stands to lose $1.2 million annually. Other cities are also facing substantial losses: Marion will lose $1.7 million, Springfield $3.8 million, Rockford $8 million, and Chicago about $80 million. These figures represent real money that supports our communities, and this shortfall must be addressed,� Lewis said.
Lewis says the local governments decide how they use their grocery tax. But for Mt. Vernon, the money would go to city projects like fixing roads or other local services they provide.
“If we don’t make that change, however, people will notice the cuts we will have to make locally to everyday programs and services, the state won’t tell you that, but we have to be upfront about it,� Lewis said.
Without the tax, when shoppers spend 100 dollars they will save 1 dollar, but Lewis says it may have an impact on saving money for those in the middle or upper class.
“Grocery prices are not high because of the 1% tax. They've risen 26% over the last five years due to inflation and wage pressures and they will continue to rise. So 1% is 1%,� Lewis said.
However, with the state’s cuts local governments can add in their grocery tax.
“We are doing everything we can, not to institute this tax,� Lewis says. “I do know many communities have no choice but to reinstate this tax. They can not take those kinds of cuts.�
For now, Lewis says the city is still working on its budget.
