“Mayors slam Pritzker’s proposal to eliminate grocery
tax,” was the Daily Herald’s headline above a story last week about
several mayors of upper-income suburban communities complaining about a
proposed tax cut.
I don’t know if the mayors quite understand this, but
headlines like that are basically an in-kind campaign contribution to the
governor and the Democratic super majority. The fact that Rep. Marty McLaughlin,
R-Barrington Hills, was the center of that press conference arguing against a
tax cut, even though he will face a hard-charging Tier One opponent this fall
just makes it even weirder. McLaughlin walked it back later in the week, but
the damage was done.
This grocery tax elimination proposal is a pretty darned
solid play by Gov. JB Pritzker on multiple political and legislative levels.
Whether it’ll become an actual law is, at this early stage, almost beside the
point. And whether it’s wise is quite another story.
The best part is that this is a state tax cut that
doesn’t cost the state budget a dime. You just can’t ask for more than that in
this business. The money raised by the tax is collected by the state and then
distributed to local governments.
It’s also a regressive tax, which hurts people at the
lower rungs of the income ladder. As one top Senate Democrat told me recently,
eliminating a regressive tax allows the governor and the General Assembly’s
Democrats an opportunity to play the good guys for a change.
The proposal has divided the Republican party, which has
to delight the Democrats. On the one hand, you had people like Rep. McLaughlin,
providing fodder for whoever writes the direct mail in his opponent’s campaign.
On the other hand, you have Rep. Blaine Wilhour, R-Beecher City, who is facing
a primary challenge and knows better than to oppose a tax cut. Wilhour said
this to his local newspaper: “The penny tax on groceries is punitive for
working families, and we should end it in Illinois.” Smart dude.
The tax cut is easy to explain and is therefore receiving
a lot of news media coverage. Everybody in politics loves issues like this,
even if they’re not all what they seem to be. A bipartisan tax cut that also
puts some Republicans in a trick bag, including some politically vulnerable
members? Sure, sign me up.
And the more attention this $325 million tax cut
receives, the less time reporters will have to flesh out the governor’s fast
move on the income tax. Instead of allowing the standard income tax exemption
to rise to its previously inflation-tied statutory levels after freezing it for
a year, the governor proposed saving the budget some money by not giving people
their fully entitled exemption this year. That technically qualifies as a tax
hike, but is not so easy to explain.
The Illinois Municipal League was all set to play some
big splashy offense this year by again pushing to raise the percentage local
governments receive from state income tax collections. But, for now at least,
the IML is forced to play defense against a popular idea. The governor and some
Democrats have pointed out that the legislature could give local governments
the ability to impose their own grocery taxes, which the mayors definitely do
not want to deal with (they’d much rather the state impose a regressive tax
than them). So, convincing the Democrats to drop the idea could mean the IML
might have to withdraw its own proposal, or something in between.
The grocery tax elimination also whacks the City of
Chicago’s budget by $60-$80 million, according to the city’s estimates.
Remember how Mayor Brandon Johnson reneged on his pledge last month to
partner with the state and Cook County to provide $70 million in funding to
maintain migrant services? At the very least, this Pritzker proposal puts the
rookie mayor on notice that there are multiple strings which can be pulled on
him.
In the end, I’m not certain this will actually pass, but
it’ll be fun to watch for a while anyway. Few legislators care about
Barrington’s budget, but they do care about the burden this could put on poorer
communities and on Chicago. Not to mention that narrowing our tax base is a
huge mistake this state has repeatedly made for generations.
However, I also don’t get the impression that Democrats
are in much of a hurry to resolve the issue because they can continue soaking
up the publicity, courtesy of the mayors and some Republicans.
