O'Fallon council advances first reading to continue 1% grocery tax after debate over reserves and equity

O'Fallon City Council on July 7 advanced on first reading an ordinance to continue a 1% municipal grocery retailer's occupation tax and a municipal grocery service occupation tax, sending the measure to a second reading at the council's next meeting.

The ordinance would maintain an estimated $1,200,000 annual revenue stream to the city's general fund, a figure cited repeatedly during the meeting by both public commenters and council members. The council's discussion centered on whether the money is needed to maintain current services and how the tax affects lower-income residents.

Public commenter Ron Zellms urged the council to oppose continuing the tax, saying the city has ample cash and recent years' audits show substantial general-fund surpluses. "I simply don't believe the city will experience any irreparable harm if this revenue stream of approximately $1,200,000 to the general fund is disrupted," Zellms said, and he cited a reported $134,479,890 in cash and investments as of March 31, 2025 and multi-year general-fund surpluses shown in recent audits.

Councilmember Jessica Lotz said she had reviewed options and staff estimates and concluded the grocery…