Gurnee board approves 0.5% home‑rule sales tax to replace state grocery tax

GURNEE, Ill. — The Gurnee Village Board on June 16 approved Ordinance 2025‑49 to add a 0.5 percentage point home‑rule retailer—s occupation and service occupation tax, a measure staff recommended to replace revenue from a 1% grocery tax the state is eliminating effective Jan. 1, 2026.

The board voted 5‑0 to adopt the ordinance after staff and trustees said the sales tax increase would largely replace $2 million to $2.5 million in annual grocery tax revenue, smooth upcoming water and sewer capital spending and shift more of the burden to out‑of‑town shoppers.

Why it matters: The village faces an imminent revenue gap after the state action removing the grocery tax. Village staff told trustees that a half‑percentage point increase in the local sales tax is the available municipal option that most closely offsets that loss while funding capital projects, primarily water and sewer main replacement. Staff said the change should be administratively in place with the state by Oct. 1 and take effect Jan. 1, 2026; sales tax receipts are paid in arrears, so the village expects its first sales‑tax remittance in April 2026 and its final grocery‑tax check in March 2026.

Details of the debate and vote: Finance Director Brian Gosnell (presented through village staff) told the board the grocery tax generated between $2 million and $2.5 million annually for the village. Staff said consumer‑expenditure data show many grocery visits originate locally, and that shifting the levy to a home‑rule sales tax will capture more spending by visitors from nearby ZIP codes, including theme‑park and outlet visitors. Trustee Woodside read the staff summary that, based on the U.S. Bureau of Labor Statistics Consumer Expenditure Survey, the average Gurnee household—s net annual tax burden would fall by about $85 under the swap, and could be larger if more household shopping occurs in Gurnee.

Public comment: Resident Keith Owens addressed the board during public comment and said he expected the ordinance to pass unanimously and supported the change as a way to protect water rates and spread capital costs across visitors as well as local taxpayers. Owens said the change would help the village avoid passing large future water‑and‑sewer cost spikes to future generations.

Formal action: The motion to approve Ordinance 2025‑49 was made by Trustee O—Brien and seconded by Trustee Balmus. Roll call was unanimous in favor; the board recorded a 5‑0 vote, and the ordinance passed.

What the ordinance does not do: The board discussion and vote were limited to adopting the local tax change; no new direction was given to reallocate existing enterprise fund balances beyond staff—s general statement that replacing the grocery tax will smooth capital funding needs. Trustees asked for and received staff analysis showing timing of receipts and the projected coverage for water and sewer capital needs but did not adopt separate spending commitments during the meeting.

Next steps: Staff must notify the state by the village—s filing deadline (staff indicated Oct. 1) for a Jan. 1, 2026 effective date. Residents should expect grocery receipts to stop in early 2026 and the first village receipts from the new sales tax to arrive in April 2026, per staff comments during the meeting.