Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
I hope everyone had an enjoyable Thanksgiving. The roundup took a week off as there wasn’t much to catch up on. We’ll publish today and two more weeks before wrapping up the year.
If it isn’t on your calendar/radar yet … the Chamber is hosting our Holiday Member Reception TONIGHT from 4:30 to 6:30 PM at the Renaissance Center, 214 N. Ottawa Street in downtown Joliet. Hope to see all of you that can make it!
*Government Affairs Roundup brought to you by CITGO*
Greater Than Half of Illinois Communities Have Enacted a Local Grocery Tax
Illinois will end its statewide 1% grocery tax on January 1, but millions of residents will still pay the same levy locally. Data from the Illinois Municipal League (IML) shows that 656 municipalities, just over half of all cities and towns in the state (including Joliet), have adopted their own 1% grocery tax. Those communities represent roughly 7.2 million residents, or 56.5% of Illinois’ population.
Governor JB Pritzker championed the elimination of the state grocery tax last year, calling it a way to ease the tax burden on Illinoisans. But because the revenue from the statewide grocery tax went directly to local governments, state lawmakers allowed municipalities and counties to replace it with their own local version and to do so by ordinance rather than referendum.
“Sales tax revenues — for general merchandise or groceries alike — are a cornerstone of many local budgets across Illinois, which is why 50.7% of municipalities took action to preserve this funding,” IML CEO Brad Cole said.
Communities that wished to levy the local tax were required to submit their ordinances to the Department of Revenue by October 1 to begin collections on January 1.
The new law also gives non–home rule municipalities the authority to impose sales taxes of up to 1% without voter approval. Many local governments used that option, including six of the state’s largest cities: Elgin, Rockford, Aurora, Joliet, Naperville and Peoria.
For some cities, a local grocery tax helps avoid substantial budget losses — such as the $4.5 million Aurora would have forfeited without it, according to IML data. Smaller communities will see far less revenue, like Oregon in Ogle County, which expects about $30,000. Revenue varies widely depending on the number and size of grocery stores within each municipality.
Only two municipalities with more than 100,000 residents, Springfield and Chicago, chose not to enact a tax. Chicago Mayor Brandon Johnson supported adopting the tax, but the City Council declined to pass it. The decision is expected to cost the city $60–80 million as it faces a projected $1.2 billion deficit in 2026.
Governor Pritzker frequently highlights the repeal of the statewide grocery tax as a major achievement on economic issues. But because local governments were allowed to reinstate a similar tax, roughly half of Illinois residents will see no benefit from the state-level change. At a June news conference in Springfield, Pritzker reiterated his opposition to grocery taxes.
“I think that the grocery tax is very, very regressive,” he said. “I think a grocery tax is the wrong way to pay for things, but I know that there are choices that get made at the local level that I may disagree with, but that local voters do agree with.”
Some communities opted to raise other sales taxes instead of adopting a grocery tax. Mundelein, Gurnee and Bartlett each increased their overall sales tax rates to make up for the lost revenue, according to the Daily Herald.
Redistricting Talks Still Loom
Illinois lawmakers are closely watching Indiana’s redistricting fight, since the outcome there could shape what Illinois decides to do next.
The issue has simmered for weeks. Indiana Senate President Pro Tempore Rodric Bray said last month that redistricting was dead, only to reverse himself under pressure from Washington and announce that the Senate would vote on whatever congressional map the House produced.
If Indiana Republicans advance a map that leans even further their way, Illinois lawmakers could face pressure from national Democrats to carve out a new map that ads more Democrats, who already hold 14 of Illinois’ 17 congressional districts.
Illinois Rejects Federal “No Tax on Tips” Rule
Illinois is not adopting the new federal “no tax on tips” provision, meaning tipped workers in the state will still owe Illinois income tax on tips, even when those tips are exempt at the federal level.
Manish Bhatt, senior policy analyst with the Tax Foundation, said Illinois’ tax structure makes it possible for the state to decline the new tip exemption.
“Only those states that begin state-level income tax calculations using the federal definition of taxable income have it automatically incorporated into the tax code,” Bhatt explained. “I don’t believe Illinois does that. So I think the states are certainly able to not incorporate that individual sort of exemption on tips and overtime wages.”
Illinois Housing Development Authority Invests $6 Million to Strengthen Housing Counseling and Grow Pathways to Sustainable Homeownership
The Illinois Housing Development Authority (IHDA) announced that 30 housing counseling agencies will receive $6 million in grant funding to expand financial education, pre-purchase homebuyer education, and foreclosure prevention counseling services for thousands of Illinois families.
“Behind every home is a story, a family working hard to put down roots, a parent striving to give their children stability, or a first-time buyer dreaming of a place to call their own,” said IHDA Executive Director Kristin Faust. “This investment from FHLBank Chicago ensures that more Illinoisans, especially those historically locked out of the housing market, will have the tools, guidance, and support they need to succeed. Homeownership should not be out of reach for anyone willing to work toward it, and together we are breaking down barriers to make that dream possible.”
The Federal Home Loan Bank of Chicago (FHLBank Chicago) created and funded the Housing Counseling Resource Program (HCRP) to expand capacity for housing counseling services to serve traditionally low- to moderate-income and underrepresented households. IHDA administers the program on behalf of the State of Illinois and, since launching in 2022, HCRP has assisted 37,000 Illinois households, including more than 3,500 first-time homebuyers successfully purchase a home.
“Together with IHDA, we’re expanding pathways to successful and sustainable homeownership across Illinois,” said Katie Naftzger, Senior Vice President and Community Investment Officer at FHLBank Chicago. “Housing counseling provides families with the knowledge and confidence to make informed decisions and create stability that lasts.”
HCRP grantee agencies are available virtually throughout Illinois and can provide in-person counseling in more than 40 counties across the state. This grant allows the housing counseling agencies to better equip Illinoisans with the practical tools to:
- Build credit readiness and financial literacy
- Access down payment assistance and affordable mortgage programs
- Understand property taxes and insurance and gather helpful tips on maintaining your home
- Protect their homes through foreclosure prevention counseling
“The Housing Counseling Resource Program has played a huge role in helping the Embarras River Basin Agency (ERBA) continue to support individuals and families looking for safe, stable, and affordable housing,” said Sandy Deters, Housing Counseling Coordinator at ERBA. “With IHDA’s support, we’ve been able to provide the kind of counseling that really makes a difference, helping people understand their options and make confident decisions about their housing. This funding will allow us to deepen our impact over the next two years, reaching more households and strengthening the communities we serve. Additionally, because of the HCRP grant, we were able to leverage these funds as a match to secure two additional grants bringing $130,000 in home repair assistance to families in our area.”
Should an HCRP participant be ready to become a homeowner, the counseling agencies will educate them on the IHDA Access Mortgage programs that are available to both first-time and repeat homebuyers. Available statewide, each mortgage option comes with an affordable, fixed interest rate and up to $10,000 to assist eligible borrowers with their down payment and closing costs for the purchase of a new or existing home. These programs not only increase affordability but also help buyers enter the market sooner and build equity faster.
Contact information for each organization is available on IHDA’s website here.
Governor Pritzker Launches $32 Million in Funding for Regional Site Readiness Program
Governor JB Pritzker and the Illinois Department of Commerce and Economic Opportunity (DCEO) announced $31.5 million in funding as part of the Regional Site Readiness Program – an infrastructure grant program designed to help communities attract businesses, create jobs, and support community renewal. Through the program, entities can apply for funding to begin planning and prepare unused or unsuitable sites such as abandoned factories or brown fields for business or community development.
“For too long, Illinois communities were left with moribund sites and missed opportunities because state government wasn’t acting as a true partner — that era is over,” said Governor JB Pritzker. “Through our Regional Site Readiness Program we’re investing in the groundwork that fuels growth. From site preparation and infrastructure improvements to community revitalization, we’re leaving no stone unturned as we clear a path for prosperity and unleash the full power of Illinois’ unrivaled workforce. I encourage all eligible entities to apply and help us grow communities, enterprises, and Illinois.”
This investment is part of Governor Pritzker’s $500 million site readiness initiative, which represents the most significant investment in state history to make more sites across Illinois ready for business. This includes $2oo million for Site Ready Illinois (including the Regional Site Readiness Program) which is designed to prepare sites across all 10 of Illinois’ Economic Development Regions to attract future investment and create new job opportunities. It also includes $300 million for the Surplus to Success program, which is led by Central Management Services and will prepare idle State-owned properties for private development.
Following historic momentum and investments in Illinois, the State is positioned to pursue and win ambitious large-scale industrial business development projects though the Site Ready Illinois initiative. The State will expand its efforts to make sites ready for business attraction and business development by funding energy infrastructure to reduce long lead times, and helping municipalities, economic development organizations, and landowners prepare sites for investment.
The Regional Site Readiness Program will build upon the State’s efforts to support communities and landowners in their site readiness planning, assessments, and infrastructure improvements. This includes addressing the financial barriers faced when gathering information and making infrastructure improvements. The program will increase the number of sites with completed due diligence and expand the pipeline for future industrial site development.
“Site Ready Illinois investments are essential to expanding the State’s successful site readiness initiatives,” said DCEO Director Kristin Richards. “I encourage eligible entities to apply for the second round of Regional Site Readiness funding for infrastructure and industrial development improvements that will make more sites ready for business.”
DCEO is investing in planning activities such as environmental due diligence and preliminary engineering costs, as well as capital ready activities including capital improvements to road or water infrastructure to increase the number of sites ready for industrial development. In addition to the $31.5 million in Regional Site Readiness Program funding available through these competitive NOFOs, DCEO plans to deploy the remaining funds for additional site readiness opportunities in the future.
Eligible applicants include local governments, economic development organizations, nonprofit organizations, and private landowners. Qualified entities can apply for Planning grants up to $150,000 and Capital Ready grants up to $5 million. Applications will be accepted on a rolling basis until March 31, 2026, at 5:00 p.m. or until funds are exhausted.
To view the Planning and Capital Ready NOFOs and apply for the grants, please visit the DCEO website. Interested parties are encouraged to reach out to CEO.GrantHelp@illinois.gov for application assistance.
“Investing in site readiness is essential for staying competitive in today’s economy. Through the Regional Site Readiness Program, Illinois is empowering communities with the infrastructure and strategic planning needed to attract large-scale investment,” said Illinois EDC President and CEO Christy George. “At Illinois EDC, we’re proud to champion this initiative and look forward to the powerful impact it will have on our state’s economic competitiveness.”
Passed in 2019, Rebuild Illinois is the largest capital program in Illinois history. The $45 billion investment is supporting improvements to the state’s infrastructure, creating jobs and promoting economic growth.
Illinois Lawmakers Push Governor Pritzker to Join New Federal School Choice Program
Illinois Republicans are urging Governor Pritzker to opt the state into a new federal school scholarship tax credit program, warning that Illinois “cannot afford to sit on the sidelines” as the initiative prepares to launch in 2027.
The program, created in a 2025 GOP-backed federal spending bill, offers federal tax credits for donations to Scholarship Granting Organizations. States must choose to participate, and supporters say opting in could bring more than $100 million in scholarship funds to Illinois families.
State Rep. Adam Niemerg has become one of the loudest advocates, arguing that the program mirrors Illinois’ former Invest in Kids tax-credit scholarship — a program that served tens of thousands of low-income students before Democrats allowed it to expire.
“It’s kind of like the Invest in Kids scholarship fund, but now at the federal level,” Niemerg said. “When Democrats refused to reinvest in a wildly successful program with 20,000 kids on the waiting list, they shut it down under pressure from special-interest groups and teachers unions. The Trump administration then took it federally, and that has now passed.”
Niemerg and other Republicans say Illinois risks forfeiting millions in private scholarship support if Pritzker refuses to opt in. “They’re going to lose out on over $100 million in scholarship tax credits meant to help underprivileged kids escape failing public schools,” Niemerg said.
House Minority Leader Tony McCombie, R-Savanna, has introduced House Bill 4099 to formally opt Illinois into the program. Niemerg said he strongly supports the measure. “I think any school choice initiative is the right way to go,” he said. “School choice is the way of the future.”
Governor Pritzker and other critics argue the program undermines public schools and diverts resources toward private institutions. In a recent news release, Pritzker called the federal measure a “major setback for students across the nation.” “Here in Illinois, we’ll do everything in our power to protect the public education systems we’ve worked so hard to improve and continue supporting students in every way we can,” he said.
The governor’s office also criticized the broader federal spending bill, saying it cuts funding for school nutrition, healthcare, and other programs benefiting working families while steering tax advantages to private school donors. Illinois, Pritzker noted, has increased K-12 funding by $2.1 billion and launched multiple initiatives to bolster teacher recruitment and retention since he took office.
The renewed school choice fight comes as Illinois students continue to trail national benchmarks. According to the 2024 Nation’s Report Card, 62% of fourth graders are below proficient in math and 70% are below proficient in reading. Niemerg argues that states with school choice programs typically post stronger academic results. “Every state that has school choice has better numbers than Illinois,” he said. “Competition breeds excellence and makes students better.”
Whether Illinois embraces the new federal program now depends on Pritzker — and whether legislators move McCombie’s bill forward in the coming session.
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
mpaone@jolietchamber.com
815.727.5371 main
815.727.5373 direct