Gurnee Village Board plans half percent sales tax to offset grocery tax elimination

The Village of Gurnee is poised to tackle the impending elimination of the 1% grocery tax in Illinois, which is set to take effect on January 1, 2026. During the recent board meeting, village officials discussed a strategic plan to fill the budget gap left by this repeal while minimizing the financial burden on residents.

Finance Director Brian Gazzle presented a detailed analysis of the potential impacts of the grocery tax elimination, estimating that Gurnee could lose between $2 million and $2.5 million in revenue. This tax, currently levied on qualifying food and drugs, is crucial for the village's budget. The discussion highlighted the need for a new revenue source to support ongoing capital projects and address water infrastructure issues, which are projected to require an additional $3 million.

To mitigate the loss, Gurnee officials are considering implementing a half-percent increase in the home rule sales tax. This approach would not only replace the lost grocery tax revenue but also provide funding for essential infrastructure improvements. Gazzle noted that this sales tax increase would be less burdensome for residents, particularly since it would be partially offset by the elimination of the grocery tax.

The board emphasized that the proposed sales tax increase would still keep Gurnee competitive with neighboring communities, placing it in the middle range of sales tax rates in Lake County. The plan aims to ensure that residents who shop locally benefit from reduced food costs while also generating necessary funds for infrastructure projects.

Trustees expressed support for the proposal, highlighting its potential to balance the village's budget without imposing additional costs on residents. The board is expected to finalize its decision and submit the necessary documentation to the Department of Revenue by the October 1 deadline to ensure the new tax structure is in place by the start of 2026.