Governor's budget proposal includes tax savings for Illinoisans

This week, Governor J.B. Pritzker will propose that state lawmakers pass legislation that would put a few extra greenbacks in the pockets of Illinoisans.

The upcoming proposal outlines three tax breaks for residents. It includes suspending the 1% sales tax on groceries for one year. State motor fuel taxes were set to increase this year. That rate hike would be frozen at 39 cents per gallon. The biggest savings in the governor's play would come by way of a property tax rebate of up to $300 for homeowners.

Homeowners will still be able to deduct the normal 5% rate of their property tax bills up to $300 from their income taxes, but the new plan would double the value of that deduction with a direct one-time payment. This rebate will apply to workers making $250,000 annually or less or to couples making $500,000 or less.

Taxpayers will get that in the form of either a check or an electronic deposit after filing a state income tax return. A return must be filed even if the individual does not owe anything in taxes.

Collectively, Illinois consumers would save about 1 billion in taxes if legislators advance the proposal. With inflation at 7% and mid-term elections on the horizon, the abatement would be paid by the nearly 1 billion currently in surplus thanks to marijuana tax revenues and federal Covid relief monies the state has received.

The reduction in tax levies would last one year. However, there is scuttlebutt that they could remain in place a bit longer.

Pritzker is not the only governor looking to cut taxes for their residents. Indiana and New York are also attempting to advance proposals aimed at lowering taxes for their residents.