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Illinois lawmakers approve $53 billion spending plan, eliminate 1% grocery tax

Illinois lawmakers nix grocery tax, add to school spending in new $53 billion budget
Illinois lawmakers nix grocery tax, add to school spending in new $53 billion budget 02:44

CHICAGO (CBS) — Illinois House lawmakers approved the fiscal year 2025 spending plan, which is said to be the largest in the state's history.

The $53 billion budget was approved with a 65 to 45 vote in the early morning hours after the state Senate passed it on over the weekend. The more than 3,000-page spending plan now heads to Gov. JB Pritzker's desk for his signature.

The budget includes more money for public schools, specifically $350 million in increased funding for schools throughout the state.

More money will also go toward reproductive health centers, with $2 million committed to increasing security at those centers. About $182 million is also being invested in shelters and other services for new migrant arrivals from Texas.

The budget also includes adding 280 frontline Department of Children and Family Services workers to improve the well-being of children in Illinois.

Sportsbooks, retailers, and other corporations will be hit with almost $750 million in tax hikes to raise more money for the state.

Lawmakers also took no action on the $1 billion ask from the Chicago Bears to help with the construction of a lakefront domed stadium. The lack of support for the Bears from Springfield may give places like Arlington Heights new life in their bids to be the new home for the team.

Democrats called the budget balanced, while state Republicans criticized an allotment of half a billion dollars to migrants and healthcare for undocumented people.

The budget will raise some taxes but will also eliminate a 1% tax on groceries and add a child tax credit. 

In a statement, Pritzker said he believes it is "A balanced budget that uplifts the working families of Illinois, saves more money in our rainy-day fund, creates jobs, lowers taxes on small businesses, grows our economy, and continues our track record of fiscal responsibility."

"We've lowered costs for working families; we invested in our children. We secured transformational economic development and job creation opportunities, all while strengthening our state's fiscal health," he said.

Illinois plans to phase out 1% grocery tax, but municipalities worry about lost revenue 02:38

Municipalities worry about revenue

The elimination of the 1% grocery tax may make a trip to the store more affordable, but it could also leave some local governments with a major hole in their budgets.

While grocery prices dropped last month for the first time in years, grocery operators like Julie Damico at Hyde Park Produce said she's always conscious of shoppers' wallets.

"It is a concern," Damico said. "We are all aware that groceries are expensive and we do our best."

Damico added she was pleased to hear that state lawmakers voted to get rid of the tax and that "any savings that we can pass onto the customers is great news for us. It's great news for the customers."

Illinois is one of just 13 states with a grocery tax.

But while grocery store operators and customers welcomed the tax cut, some local municipalities depend on the money.

North suburban Libertyville Mayor Donna Johnson and Algonquin Village President Debby Sosine said the 1% grocery tax keeps their communities running. The revenue helps fund vital services like police, fire and public works.

Johnson said the $850,000 her village receives via the tax revenue "is significant" for a community of about 20,000 residents.

"How are we going to make up this $2 million deficit in our budget?" Sosine said.

Reporter: "Is it fair to say you rely on this $2 million in your budget every year?"

Sosine: "Very, very much so, we do."

Municipalities will have until 2026 until the grocery tax is eliminated. Local governments will then have the ability to reinstate the tax without asking voters.

Johnson said Libertyville plans on keeping the tax in place.

"While we welcome some options, we really don't like that we are being positioned as the villains by reinstating it when the governor of the state eliminated it," Johnson said.

Sosine said all options were still on the table for Algonquin.

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