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DeKalb council preserves local 1% grocery tax to offset $800,000 loss from state change
Summary
The DeKalb City Council on June 23 approved Ordinance 2025-028 to add a municipal grocery retailers/service occupation tax, preserving a 1% tax locally after the state change; council debate focused on budget needs, distributional effects and timing for the city budget.
The DeKalb City Council voted 5-2 on June 23 to adopt Ordinance 2025-028, authorizing a municipal grocery retailers occupation tax and a municipal grocery service occupation tax to replace the state-level 1% grocery tax that will no longer be remitted to municipalities.
City Manager Bill Nicholas told the council the ordinance is intended to “replace the state tax that will be going out at the end of the year with a local 1% tax,” and that the city estimates the change would otherwise reduce local revenues by about $800,000 annually. He said the city’s finance projection and a report summarized from the Illinois Municipal League indicate the change would amount to about $30 a year for modest households and a larger amount for higher-income households.
The measure drew more than an hour of council discussion about trade-offs between household relief and municipal services. Alderman Larson, Alderman Smith, Alderman Carlson, Alderman Powell and Mayor Barnes supported keeping the tax in place; Alderman Verbeck and Alderman Walker voted no. Supporters said the revenue funds public safety, street repairs and social service grants; opponents urged additional budget scrutiny and expressed concern about setting new local tax policies.
City staff said proceeds have been used for first-response staffing and equipment, social service grants (a $300,000 annual program was cited), and capital fixes including water system investments. Council members noted unfinished capital needs—lead service line replacement and street resurfacing among them—and framed the $800,000 as equivalent to multiple public-safety hires or sizable street program reductions if lost.
Duane Brown, a public commenter, urged eliminating local grocery tax to lower costs for residents, saying the tax is “regressive and disproportionately affects lower income households.” City staff responded that SNAP recipients are exempt from the grocery tax under federal law and that the city’s analysis found the lowest-income households would not bear the tax burden.
The ordinance passed on first reading and the council unanimously voted to waive the second reading the same night, making the change effective under the city’s ordinance procedures.
