Lake County Gazette

With high inflation rates affecting consumers nationwide, state level politicians and candidates in Illinois are speaking up. Many of the Republican candidates slated for the November election believe that Springfield should be looking to provide long-term relief to consumers, rather than stints of alleviation during times of economic hardship. In the last four months, elected officials in Illinois have made strides to keep money in the pockets of consumers through a series of tax freezes and suspensions. To many Republican candidates, these are election year gimmicks and if the current representation is re-elected the status quo of poor credit ratings caused by budgeting issues will continue.

As part of Gov. J.B. Pritzker's plan to combat soaring prices, the grocery tax of 1% in Illinois would be suspended from July 1 until June 30, 2023, Newsweek reported.

The year-long tax suspension will save taxpayers up to $400 million, even though the state would not be lifting the 1% tax levy on medicine and hygiene products, the story said.

"Lake County families are paying more to put food on the table today than they ever have – this inflation is painful for so many," said Adam Solano, a Republican candidate for Illinois State Senate District 31. "Rather than giving working families in our communities real relief, Mary Edly-Allen and the Democrats in Springfield are offering temporary election year gimmicks that attempt to trick voters instead of truly helping them. Illinois is one of only 13 states that still forces their residents to pay taxes on groceries. I call on the state legislature to permanently abolish the state’s grocery tax so that hardworking Illinois families can have a real, long-lasting reduction to their cost of living.”

The U.S. Bureau of Labor Statistics reported that over the past 12 months, the Consumer Price Index (CPI) for food is at 11.4%. To further break down that percentage change, food at home has increased 13.5% and food away from home has increased 8.0%.

Illinois Policy provides a broader view of the effects of inflation reporting in June that the average private-sector worker in Illinois is experiencing what is really a pay cut. Over the last 12 months, those in the private-sector saw a pay bump of more than $3,408, however, to keep up with cost of living the rise in wages needs to be $5,635.

Currently, Illinois is one of 13 states that taxes groceries, according to the Center on Budget and Policy Priorities. The others are Idaho, South Dakota, Utah, Kansas, Oklahoma, Missouri, Arkansas, Tennessee, Mississippi, Alabama, Hawaii and Virginia. Four of these states – Hawaii, Oklahoma, Idaho and Kansas – have state tax credit that partly offsets the cost of tax helping lower income families. The Center on Budget and Policy Priorities reported that sales taxes on groceries have a significant impact on low-income families as they spend more of their income on groceries. By income, the lowest 20% spend 10.3% on food at home while the highest 20% only spend 5.7%.

Tax Foundation researcher Jared Walczak reported that sales taxes are more economically efficient, compared to other methods of taxation, as they are "more stable and pro-growth." Walczak’s reasoning is that sales "tax does less to influence economic decision-making and does not directly tax labor or investment." When sales tax is the main method of state revenue, households are more likely to set aside money for the future while also providing the state with a more stable revenue stream. Another point made was that grocery taxes do scale with income as higher income families will purchase larger quantities of high quality food and lower income families will purchase based on need. However, an important component to this is tax credits  targeted at low-income households.

The Tax Foundation has Illinois ranked at 13th in the nation for income tax and shows that the state does not provide recurring tax credits to low-income families which would suggest that  suspending the grocery tax in Illinois is a short-term solution to rising costs.

Solano is a native to Lake County and has lived in Grayslake since 1996. He began his career in financial services in 1993 and has continuously served in local professional groups, providing his  knowledge to peers in the same profession and mentoring up and comers.