Finance committee members discussed municipal options to replace the repealed Illinois statewide grocery tax at their Aug. 25 meeting, requesting staff analysis of alternatives and scheduling before the state filing deadline to avoid a revenue gap.

A committee member summarized the change: “Governor Pritzker repealed the statewide grocery tax and left it up to the municipalities to decide whether or not they wanted to impose their own grocery sales tax,” and noted the village has the statutory ability to have the state continue to collect and remit a local grocery tax if the village elects to impose one.

Committee members framed the question as one of equity and local preference. One member said the grocery tax is “the most regressive of taxes” and urged the board to consider alternatives that would be less regressive, including a modest increase in the village’s home‑rule sales tax (currently taxed at 1%), a property‑tax increase (limited by the village’s policy commitments), or targeted spending cuts. Staff told the committee that of 215 home‑rule communities in Illinois, roughly 91 impose a home‑rule sales tax greater than 1% and that most North Shore communities remain at 1%.

The committee also reviewed near‑term budget mechanics: staff noted a $320,000 sales‑tax rebate currently on the village balance sheet that “sunsets next year,” and cautioned that the village’s long‑term capital plan assumes that revenue stream will continue. Committee members asked staff to return with comparative data on other towns’ home‑rule rates, the effect of varying a home‑rule rate by quarter‑percent increments, and the fiscal impact of preserving versus replacing grocery‑tax revenue.

The committee discussed timing. Staff and members agreed that to avoid a gap in collections the village must adopt and file its local grocery tax election before the state’s deadline; participants corrected one another during the meeting but identified a relevant filing cutoff at Sept. 29 to maintain a seamless transition of collections. Committee members requested that alternatives be presented in a committee‑of‑the‑whole workshop before that filing date.

No formal vote or ordinance adoption occurred at the meeting. Staff said it will return with a packet that includes (1) comparisons of home‑rule rates across similar municipalities, (2) revenue projections for different home‑rule scenarios and (3) timing recommendations for filing to avoid a gap.

The committee’s decision on whether to replace the state grocery tax with a village grocery tax or use alternative measures will affect the village’s revenue mix and could appear as a recurring line item in monthly financials if the village decides to continue the revenue stream.