Should Mundelein enact a 1% grocery tax to replace disappearing state fee?

Mundelein officials on Monday will discuss whether to create a 1% municipal grocery tax that would replace a state tax set to be eliminated Jan. 1.

The state grocery tax generates between $1.1 million and $1.2 million for Mundelein each year, documents indicate.

Gov. JB Pritzker proposed getting rid of the grocery tax in 2024, and the change was included in the state budget approved that August.

Mundelein officials increased the village’s sales tax rate in October 2024 to 8.25% from 8% to compensate for the anticipated elimination of the grocery tax. Regardless of what the village board opts to do with the grocery tax, that quarter-percent rate change isn’t proposed to vanish, documents indicate.

The sales tax increase approved in 2024 has offset downward trends in sales tax, telecommunications tax and cable franchise fees, village Finance Director Linda Miller said in a memo.

Miller attributed those declines to the expansion of cannabis dispensaries in the area, which has shrunk Mundelein’s share of tax revenue from the Rise pot shop in town, as well as consumers shifting away from using landline phones and cable TV services.

Mundelein trustees will debate their options during a finance committee meeting Monday night. It’s set for 6 p.m. at village hall, 300 Plaza Circle. The meeting will be open to the public and also livestreamed at mundelein.org.

No final decision will be made at that meeting; that’ll be up to the full board at a future gathering.

Municipalities have until Oct. 1 to create a local grocery tax. Des Plaines, Palatine, Wheaton and Buffalo Grove are among the towns that have done so.