Consumers have been hammered with inflation on groceries during the past four years. Illinois was heading in the right direction by eliminating the tax on them, but now communities are faced with either imposing a new grocery tax or losing the money.
By Ravi Mishra | Illinois Policy Institute
Grocery prices ballooned by nearly $3,000 in just the past four years in the U.S., a massive increase considering prices only increased by about half that amount in the 10 years before 2020.
Illinois prices were similar, but Illinois has been one of only 13 states that taxed those groceries. It seemed as if Gov. J.B. Pritzker was eliminating that 1% grocery tax starting in 2026, but now local communities are faced with an ugly choice: reimpose the 1% tax on residents or give up the grocery tax revenue.
Consider the impact on a family of four buying what the U.S. Department of Agriculture defines as a “low-budget meal plan.” In January 2020 they would have spent an average of $858 a month on groceries. Inflation by May 2024 boosted that to $1,064 – $2,473 more per year. That same shopping list only rose $1,164 a year between 2010 and 2020.
The USDA’s “moderate cost” meal plan went from an annual increase of $1,429 from 2010-2020 to $2,940 a year more from 2020-2024.
Illinois will eliminate the grocery tax Jan. 1, 2026 – sort of. State lawmakers and Gov. J.B. Pritzker killed the tax as part of the current state budget, but they gave up nothing by doing so. Grocery tax revenue does not go to the state, it stays with local municipalities.
More here.