As food costs soar, Mayor Brandon Johnson wants to keep hurting Chicago’s working families with a grocery tax. He faces a $1.12 billion deficit that a $73 million grocery tax won’t budge.
Illinois is phasing out its 1% state grocery tax because it hurts low-income families, but Chicago Mayor Brandon Johnson is pushing to keep it.
Johnson is trying to close a $1.12 billion deficit in the fiscal year 2026 budget. Part of how he wants to close the gap is by keeping about $73 million the grocery tax is expected to generate for the city in 2026.
The grocery tax is a regressive form of taxation, hitting low- and middle-income families the hardest. Taxing people’s need to eat is especially callous, especially for households not eligible for food assistance, because it makes weekly grocery runs even more expensive as inflation and high interest rates already strain family budgets.
Grocery costs are already soaring
High food costs are a major source of anxiety across the U.S. In a recent Associated Press-NORC poll, 86% of Americans said they are stressed by the cost of groceries, with 53% citing it as a major source of financial stress. Chicago is no exception.
Grocery prices have remained highly elevated in the Chicago area since the pandemic, according to St. Louis Federal Reserve data. Since June 2019, food prices have increased by 28.6%. They are outpacing inflation, which rose 25.9% in the same span.
A typical Chicagoan pays $350 a month for groceries, according to IndexYard, A family can expect to pay between $800 and $1,000. That means a 1% grocery tax can add over $100 to a family’s grocery bill in a year.
Chicago is already one of the most heavily taxed cities
From sky-high property taxes to some of the steepest sales taxes in the nation, Chicagoans already bear one of the heaviest local tax burdens. Taxing groceries keeps Chicagoans’ cost of living high and reinforces a troubling trend: whenever there’s a budget shortfall, City Hall reaches into taxpayers’ pockets instead of addressing overspending.
Rather than adopting a tax that harms some of the most vulnerable, Chicago should seek sensible, long-term solutions, such as:
- Before considering new taxes or fees, the city should make serious cost-saving moves. Departments such as the City Treasurer’s Office, Public Health and Innovation & Technology have each grown by over 80% since 2019. A comprehensive review of programs, staffing and rising contract costs could uncover millions in sustainable savings.
- Chicago should tie its spending growth to what taxpayers can afford. Capping the city’s corporate fund annual increases to 10-year average growth of the consumer price index provides stability and predictability, while preventing spikes during high inflation periods.
- Chicago has some of the worst-funded pension systems in the nation. Pension reform is the surest way to fix city finances and reduce the burden on taxpayers. Chicago leaders should urge the Illinois General Assembly to put an amendment to the Illinois Constitution on the ballot that would allow for reform. Comprehensive pension reform would protect the solvency of workers’ retirement funds, reduce how much pensions take from other priorities in the city’s budget and align the cost of Chicago’s government more closely with what city taxpayers can afford.
Chicago has until Oct. 1 to decide whether to levy its own grocery tax. While retaining the grocery tax may offer short-term relief to City Hall, it does so by squeezing families who are already stretched thin. Chicago should choose reform – not squeezing taxes from those least able to afford them – to be a city that works for everyone.
