Latest news with #HomeRuleSalesTax
Chicago Tribune
2 days ago
- Business
- Chicago Tribune
Aurora considers extending grocery tax that would otherwise expire
The city of Aurora is considering extending a grocery tax that has been in place statewide for decades but is set to expire at the end of this year. Illinois first put in place the 1% grocery tax in 1990 to help fund local governments, but it was repealed by a state bill passed last year. However, that bill allowed cities and villages to set their own tax to replace the statewide one. Gov. JB Pritzker, who signed the bill, has said the statewide grocery tax hurts poorer people in particular because it takes a larger chunk of their income; however, the tax does not apply to those who receive benefits from the national Supplemental Nutrition Assistance Program, also called SNAP, according to reporting from the Chicago Tribune. Aurora receives around $4.5 million in revenue through the grocery sales tax each year. Without those funds, which help pay for public safety, road maintenance, public works, community programs and environmental services, the city would likely need to look to alternative funding sources or make cuts to services, according to Stacey Peterson, Aurora's director of financial operations. Peterson proposed continuing the 1% grocery sales tax within the city at a meeting of the Aurora City Council's Finance Committee last week. Aldermen on the Finance Committee voted 4-1 to recommend continuing the tax, and now the proposal is set to go before the Committee of the Whole on Tuesday at 5 p.m. There, all the aldermen on the Aurora City Council will have the chance to discuss the item before it goes officially before City Council next week for a final vote. Cities and villages have until Oct. 1 to approve the local continuation of the 1% grocery sales tax, which would take effect on Jan. 1, 2026, just after the tax expires statewide. Many nearby communities have already approved local extensions of the tax, including Montgomery, Sugar Grove, North Aurora, Batavia, Geneva and St. Charles, as have others throughout the Chicago area and the state. At the Finance Committee meeting last week, Peterson and Ald. Edward Bugg, 9th Ward, stressed that the proposed grocery sales tax would only be a continuation of an existing tax, not a new tax on residents. According to a staff report about the proposed tax included with the online version of Tuesday's Committee of the Whole meeting agenda, the grocery tax only applies to food that is bought and then taken to a different location to be prepared and eaten. Food that is to be eaten immediately, such as restaurant food, is taxed at the regular sales tax rate of 8.25% plus the Food and Beverage Tax rate of 1.75% for a combined rate of 10%, but is not impacted by the grocery tax, staff said in the report. The city's Home Rule Sales Tax rate of 1.25% does not apply to items covered by the grocery tax, the report said. Mayor John Laesch has been saying that the city is in a difficult financial place. During his inauguration speech in May, he said the city is 'serious debt,' that his administration needs to get the city's 'financial house in order' and that residents will likely be seeing a property tax increase. Aurora officials also believe that the city has been losing $4.3 million in tax revenue each year because of a perceived undercount of the city's population in the 2020 census. A special census was planned for this year to hopefully make up for some of that undercount and secure more funding, but it has been postponed. Last month, the Aurora City Council approved the sale of up to $95 million in bonds for projects that were approved under former Mayor Richard Irvin, some of which Laesch voted against. Those projects included the construction of a relocated Fire Station 9, a new Fire Station 13, the new fire department headquarters building, the RiverEdge Park renovation and the recently-constructed new Public Works facility as well as the roadway improvement project around Farnsworth Avenue and Bilter Road. That bond issue is expected to have a roughly $9.25 monthly impact on the property tax bill of a $300,000 house, but the city does have the option to use other funds if available to help repay the bonds, Aurora officials have said. In addition to the continuation of the grocery tax, Aurora is also proposing doubling its hotel occupancy tax rate of 3%. That proposal is also set to go before the Aurora City Council's Committee of the Whole on Tuesday.
Yahoo
06-03-2025
- Business
- Yahoo
'Putting the onus on us': Washington latest Peoria-area city to discuss local grocery tax
Washington is the latest city in the Peoria area to discuss instating a local grocery tax increase to replace revenue lost when the state of Illinois removes its 1% state tax starting in 2026. East Peoria Mayor John Kahl announced last week the city would institute a 1% grocery tax to cover the expected $2 million shortfall, while Pekin also instituted a similar tax on November to make up for a estimated $1.5 million loss. Peoria Mayor Rita Ali said last year the city is working on a plan to cover the possible $4 million it will lose. City officials say Washington would lose $500,000 in annual revenue if its does not institute its a local tax. In response, the Washington council shared opinions about the tax, but no vote or action was taken. 'Adverse effect': East Peoria mayor criticizes Pritzker for ending Illinois grocery tax Councilmember Brian Butler said the council should not view the move as a tax increase, but rather a shift of burden from the state to the city. 'It's simply a move from the General Assembly washing their hands of it, because that's money that came to cities anyway. Now they're putting the onus on us,' Butler said. 'The tax is in effect now. I believe we need to keep it in effect, but it takes a hard decision on our part. We look like bad guys, but we have to do the tough work sometimes, and I believe we really need to. It's no impact on anybody.' Council member Bobby Martin III said if the city is going to lower taxes, it should do it from local property taxes instead since cutting the grocery tax would benefit the large number of non-Washington residents who come to the city to shop. Other councilmembers expressed concern about city services needing to be cut, or if taxes would need to be raised to make up for the money used to help feed Washington's police pension fund that must be paid by 2040. Council member Brett Adams said avoiding tax raises is unrealistic, and he worries the city would eventually be forced to levy an even bigger tax in the next few years to collect necessary money for city projects. Washington projects: Here are the road improvements slated for Washington in 2025 'To continually say that the answer is 'Just don't raise our tax,' then start thinking about the multitude of millions of dollars worth of things that you're not going to pay for, because it's not reality,' Adams said. 'Costs continue to go up every year.' Mike McIntyre said a 1% tax is a minimal amount of money, and he would hate to see the city have to push a Home Rule Sales Tax instead to recover if the grocery tax didn't pass. Despite support from half the council, concerns about grocery costs caused hesitation for other members. John Blundy said during his time on council he's seen taxes increase, but has hardly ever seen them go down. He said the city should wait until the money is really needed, since the grocery tax can be implemented any budget cycle. Mayor Gary Manier countered if the city waits until January 2026 to reinstate the tax, it will feel like a brand-new tax to citizens after a year without it. Washington council: Mayor breaks tie on release of legal opinion about own possible conflict of interest Illinois Gov. JB Pritzker defended ending the tax during an appearance in Peoria last year, calling it an "embarrassing" and "regressive" tax. Council member Lilija Stevens, running for Mayor, argued against the tax, saying not establishing it would help lower grocery costs even if minimally. She also pointed out a city bond from 2006 supporting Five Points, set to retire in 2029, will bring in $360,000 the city could use. 'I probably might feel differently if we were a city that would be losing a couple million dollars,' she said. 'I personally do not want to create another ordinance for this tax money.' This article originally appeared on Journal Star: Washington proposes 1 percent grocery tax after end of Illinois tax
