McHenry council adopts 1% grocery tax to take effect Jan. 1, 2026

The McHenry City Council voted to adopt an ordinance imposing a 1% municipal grocery retailers occupation and municipal grocery service occupation tax, effective Jan. 1, 2026. The measure passed on a roll-call vote: six members voted yes and one voted no.

City Administrator Carolyn explained timing constraints and options for adding the tax, telling the council that municipalities have limited windows in the year to adopt such taxes and that if council does not act before October 1 the next effective date would be the following April. “They only gave us the option to add the 1 percent,” she said. She also said the city can reverse the tax later if council chooses.

Alderman Bassi opposed the levy in the meeting, calling it regressive and expressing concern about its impact on lower-income residents. “This regressive tax is really going to hit the lower income versus the higher income,” Bassi said during the discussion and urged the council to consider alternative revenue sources such as higher hotel/motel taxes and a venue fee on concerts.

Alderman Glab defended adopting the 1% tax now, saying it spreads the cost across everyone who spends money in McHenry and would avoid shifting the burden to property taxes if the city later needed to recoup the revenue. “If we take the 1% off, we wind up with — we’re gonna be looking for that revenue somewhere else that our residents here in the city are gonna have to pay,” Glab said.

Council members asked procedural questions about whether a half-percent option was available; Carolyn said the state process had offered the 1% option and that the adoption windows are constrained. Staff also clarified that the municipal grocery tax revenue would be retained by the municipality and not split with the state.

The ordinance was approved; council members said staff will return with more analysis as part of future budget discussions and that council may revisit the issue if circumstances change.