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Brookfield weighs reauthorizing 1% grocery tax as state repeal shifts revenue to municipalities
Summary
Village staff told trustees the statewide grocery tax will end Jan. 1, 2026, and the village can re-establish a 1% local grocery tax by ordinance; staff estimated the revenue at about $50,000 annually and recommended the board consider an ordinance to preserve county-allocated revenue for local services.
Doug (village staff presenter) told the Committee the state’s August 2024 legislation eliminates the statewide grocery tax effective Jan. 1, 2026, but permits individual municipalities to reauthorize a 1% local grocery-tax ordinance. "It is not going to be a new tax," Doug said, explaining that the 1% is already charged at the point of sale and currently collected and distributed by the state; reauthorizing locally would keep the revenue flowing to Brookfield rather than being removed from municipal receipts.
Staff estimated the village’s share from the grocery tax has historically been about $50,000 annually and said the funds have supported public safety, code enforcement and transfers to infrastructure projects; staff noted anticipated revenue shortfalls (including an expected loss of cannabis-related revenue and a dip in sales-tax receipts) that complicate Brookfield’s 2026 budget planning. To have a January 1, 2026 effective date the village would need to adopt an ordinance by Oct. 1, 2025 so the Illinois Department of Revenue can update collection systems.
Trustees expressed two recurring concerns. First, several trustees asked whether the village could absorb the lost revenue through budget adjustments instead of reauthorizing the tax; staff said that while absorption is possible, the grocery-tax revenue helps avoid cuts to capital projects and services. Second, trustees raised equity concerns, noting that grocery taxes often fall disproportionately on lower-income households; staff acknowledged the distributional effects and said the decision requires balancing fiscal needs with equity considerations.
Staff also pointed to neighboring communities that were evaluating similar local ordinances; trustees discussed potential competitive impacts on local grocers but generally decided to continue deliberation at upcoming July meetings to meet timeline constraints.
Ending: Trustees directed staff to place the grocery-tax item on the early July agenda for further discussion; any ordinance would need to be adopted by Oct. 1, 2025 to be effective Jan. 1, 2026.
