Carbondale council reinstates 1% grocery tax, citing budget gap; vote passes 4-1 with one abstention

The Carbondale City Council on April 10 approved an ordinance to impose a 1% municipal grocery tax and a corresponding municipal grocery retailers nd service occupation tax effective Jan. 1, 2026.

Staff said the tax restores a revenue stream that the state has eliminated effective Jan. 1, 2026. The state-level grocery tax had been distributed to local governments; without state reimbursement, municipalities would face revenue declines. Staff estimated the local revenue loss at roughly $1,000,000 and said retaining the 1% at the municipal level would restore an estimated $1,000,000 to the city general fund — funding that, staff said, supports public safety, streets, parks and other essential city services.

Councilmembers debating the ordinance framed the vote as a choice between restoring an already-existing tax flow that the city had counted on in the budget and making deeper cuts to city services. Councilmember Doherty supported reinstatement, calling it essential to the general fund. Councilmember Kilman framed the tax as a pass-through that residents already pay under the state levy and noted that SNAP purchases remain exempt.

Councilmember Maxwell said she was concerned about additional taxation on residents who are already struggling. In the roll call, Councilmember Ry Sanders recorded an abstention. The transcript records the roll call as follows: Councilmember Ry Sanders — abstain; Councilmember Doherty — yes; Councilmember Hill — yes; Councilmember Kilman — yes; Councilmember Maxwell — no; Mayor Harvey — yes. The motion carried.

Staff recommended the ordinance to preserve municipal revenues in the face of projected reductions to state-shared revenues and use the funds for core municipal services; council directed staff to implement the ordinance with the stated effective date of Jan. 1, 2026.