Gurnee board weighs 0.5% home-rule sales tax to replace stategrocery tax, dedicate funds to water infrastructure

GURNEE, Ill. May 19, 2025

Village staff told the Gurnee Village Board on Monday that the staterepeal of the 1% grocery tax will likely cost the village an estimated $2to2.5 million and recommended replacing that revenue by raising the villagehome-rule sales tax by 0.5%, with half of the new revenue dedicated to water and sewer infrastructure.

The board did not vote. Staff said it will work with the village attorney to update a prior ordinance and return with an ordinance for consideration; any change the village adopts would need to be filed with the Illinois Department of Revenue by Oct. 1 to take effect Jan. 1, 2026.

Why it matters: the finance director presented the proposal as a way to backfill the lost grocery-tax revenue while addressing an identified $3 million funding gap for long-term water and sewer infrastructure. Trustees repeatedly said they favored removing the grocery tax because it directly lowers the cost of food for residents, and they supported using a sales-tax change to shift some of the burden to visitors and nonresident shoppers.

Village staffpresentation and numbers

Finance staff told trustees the state1% grocery tax repeal is included in Public Act 103-0781 and will be repealed effective Jan. 1, 2026. The villages estimated revenue at risk from that 1% ranges "between 2 and 2 and a half million," the finance director said. Staff also identified a roughly $3 million shortfall to address water-sewer infrastructure needs identified in the village capital plan, bringing combined near-term needs to about $5to5.5 million.

Staff proposed increasing the village's home-rule sales tax in quarter-percent increments allowed by state statute. The finance director said a quarter-point of home-rule tax "gets us just under $3,000,000," and that a half-percent increase would produce enough revenue to cover the combined need. He also presented household-level estimates: the existing 1% grocery tax currently amounts to about $165.12 annually for an average Gurnee household, while a half-percent increase in the home-rule sales tax would raise that household's annual cost by about $80.13. Staff also estimated that financing the water-infrastructure gap through the water bill instead of a sales-tax change would increase the average household's annual water bill by about $178.56.

Staff used private foot-traffic data (Placer AI) to describe customer patterns at local stores and said roughly 35% to 48% of grocery-store visits are from Gurnee ZIP codes and that about 55% of grocery visits come from shoppers aged 52 and older. Staff said it had contacted Simon Property Group about any retail recruitment concerns; Simon told staff local tax rate was not a primary factor in attracting retailers in this market.

Board discussion and public comment

Public commenter Keith Owens, who identified himself as a Gurnee resident, urged trustees to consider local housing and food burdens as they weigh revenue options, saying, "Homelessness is not a choice. Homelessness is when you run out of choices." Several trustees said they supported removing the grocery tax because it directly reduces the cost of food, and they preferred a sales-tax change because it would be paid in part by visitors and nonresident shoppers.

Trustees asked staff follow-up questions about the distribution of tax burdens, the administrative steps required to file an ordinance with the Department of Revenue, and whether a sales-tax increase would harm retail recruitment. Staff said they would pull the previous ordinance (from February 2014), update it with current language, work with the village attorney, and return to the board with proposed ordinance language.

Next steps

No ordinance was adopted Monday. Staff will draft proposed ordinance language and return to the board for consideration; trustees were told an ordinance must be filed with the Department of Revenue by Oct. 1 for any local tax to take effect Jan. 1, 2026.

Ending note

Trustees characterized the proposal as a way to preserve village services and advance long-term infrastructure projects while reducing the grocery tax burden on residents; staff will return with formal ordinance language and financial detail for a future meeting.