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Marion keeps 1% grocery tax to preserve roughly $1.8–$2.2 million in municipal revenue
Summary
Mayor Absher and city staff told the council that failing to continue the 1% municipal grocery retailers occupation tax could cost Marion an estimated $1.8–$2.2 million, and the council approved Ordinance 4021 to maintain the tax (6–0).
Marion Mayor Absher said the council adopted Ordinance 4021 to implement a municipal grocery retailers occupation tax, arguing the move preserves existing municipal revenue rather than raising taxes. "If we do not take tonight's action ... we have anywhere between 1.8 million and $2.2 million of revenue loss," the mayor said, calling the loss equivalent to roughly 19% of Marion's municipal tax collections.
Absher told the council the change responds to a state decision that removed a statewide grocery tax collection that municipalities previously received. He said the city must notify the Illinois Department of Revenue by October 1 to continue collection and framed the local ordinance as maintaining the status quo for residents: "This is not a tax increase. It is literally the status quo as to what it always has been and what it is today," he said.
City staff and council members discussed alternatives, including raising the city's home-rule sales tax, but Absher said a home-rule increase would require an immediate special meeting and a larger, regressive increase on many purchases. He noted that roughly two-thirds of Marion's grocery sales are made by shoppers who live outside the city's ZIP code and argued that passing the municipal grocery tax spreads the burden among users of large retailers located in Marion.
The mayor provided line-item context for the estimated impact: he said the loss would translate to the equivalent of about one-third of the police budget or about 90% of the fire department budget if not replaced, and that it would require deep cuts to personnel if the city took no action. Council members asked staff to clarify how the model ordinance treats grocery delivery or service transactions; Absher said city staff would follow up with more detail for a future meeting.
The council voted to approve Ordinance 4021 implementing the municipal grocery retailers occupation tax (motion moved and seconded, roll-call vote unanimous). The ordinance requires the city to notify the Department of Revenue by the statutory deadline to maintain collection; staff said further clarifications about taxable delivery and service channels would be provided on follow-up.
