Committee recommends municipal grocery tax to replace state collection; trustees split 4–2

Orland Park’s Committee of the Whole voted to recommend that the Village Board adopt an ordinance creating a municipal grocery retailer's occupation tax and a municipal grocery service occupation tax to replace revenue the state recently stopped remitting to municipalities.

Staff said the state’s change will cause an estimated $4 million to $4.5 million annual gap in village revenue; the village would collect a local tax closely modeled on the prior state collection to preserve existing municipal funds. Proponents argued the move maintains services without steep budget cuts; opponents said trustees should identify expense reductions first and avoid increasing tax burdens.

Chris (staff) explained the tax applies to unprepared grocery items (food intended to be taken home and prepared) and does not apply to prepared foods, alcohol, tobacco or dietary supplements. He noted many neighboring municipalities have enacted the municipal grocery tax as the state ended its distribution. Staff estimated the village’s collection-handling fee to be about $90,000 annually.

Trustee Jesse Healy expressed skepticism about new taxes and asked about expense cuts; staff said reductions would require service or staffing cuts with material impacts. Trustee Justin Milani (public comment) questioned timing and accused the administration of shifting campaign messaging, a claim other trustees rejected. Trustee Josie Lawler and Trustee Jesse Lawrence argued the tax continues an existing levy the village had been receiving and that adopting municipal collection preserves core services; Trustee Lawrence said the local municipality can later adjust policy if revenues change.

On roll call the motion to recommend the ordinance passed 4–2 (Trustees Healy and Dusty Malani voted no). The committee forwarded the item to the Village Board for formal adoption; staff said the municipal tax, if adopted, will be separately identified in future revenue disbursements so the village can track its effect going forward.

The committee’s action is a recommendation to the board; no final tax rate change is effective until the Village Board adopts the ordinance and any collection mechanisms are implemented.