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Illinois taxes increase on basic necessities Saturday

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(The Center Square) – Two taxes on basic necessities in Illinois are set to increase beginning Saturday.

With the start of the new fiscal year July 1, the state’s gas tax will increase by 3.1 cents a gallon to a total tax of 45.4 cents. That’s the second increase of the motor fuel tax since Jan. 1, when it increased by an additional 3.1 cents. The state’s tax on groceries will also go back to 1% after Gov. J.B. Pritzker put a hold on the tax during last year’s election cycle.

Pritzker addressed the increase on the grocery tax this week. He said he froze the increase last year due to record inflation and said the money will not go to state government.

“I would like very much to eliminate entirely the grocery tax,” Pritzker said. “But it is a matter of local governments and what they would do if they didn’t have that income as a result of the grocery tax.”

Pritzker said critics have no plan to address the lost funds if the tax is not enacted.

“I now here often, Republicans complaining that the grocery tax is being reimposed but these are the same folks who don’t have a solution for ‘Well how would you reimburse local governments there,'” Pritzker said.

Bryce Hill of the Illinois Policy Institute said the gas tax has only continued to increase since Pritzker has been in office.

“Previously, it used to be 19 cents in 2018,” Hill told The Center Square. “Beginning in July of 2019, he doubled that to 38 cents, and then he also indexed the gas tax to inflation, meaning that it automatically increases every year.”

Certain municipalities can also set their own local tax on gas, which means some areas of the state will be paying even more on top of the already increased state tax.

“At the local level, on top of the gas tax, you have the ability for localities to tax gasoline, which many do,” Hill said.

Some have said the reinstatement of the grocery tax is needed for the state to make up some of the money it lost due to inflation and that 1% is not that steep.

“We need to keep in mind that this is a 1% tax that’s being reinstated. So, you’re talking about one penny on every dollar. And there were no real complaints about it prior to it being put into place,” Illinois Retail Merchants Association’s Rob Karr told The Center Square.

According to Hill, higher fees hurt Illinois residents who are already facing some of the highest property taxes in the nation and just recently, the Chicago Public School board announced it could increase property taxes by 5% for the coming school year.

“Now what’s going to happen is you are going to feel the full effect of property taxes without any sort of offset with your income taxes, and nothing has been done at the state level to address the cost drivers of property taxes,” Hill said.

The state’s recently approved fiscal year 2024 budget includes other fee increases. Certificate of title, except for an all-terrain vehicle, off-highway motorcycle, motor home, mini motor home, or van camper, will be $165, up from $155.

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