Lake in the Hills approves local grocery tax

Lake in the Hills is among the latest area municipalities to retain the grocery tax.

Illinois lawmakers and Gov. JB Pritzker opted to get rid of the 1% statewide grocery tax effective Jan. 1. But local communities were given the chance to enact their own by October. Hundreds of towns throughout the state have done so.

The Lake in the Hills Village Board voted unanimously Aug. 28 to keep the tax.

A member of the public weighed in before the vote, saying it is imposing taxes but isn’t reducing the village’s spending.

Village Administrator Shannon Andrews said Lake in the Hills has kept its property tax levy flat for the past 15 years, which has made the village reliant on other sources of revenue. Andrews added the grocery tax wasn’t new, and “it’s really the restoration of what we have become dependent on in lieu of that property tax.”

The levy is expected to increase this year after the village board voted in the spring to eliminate special service areas. Special service levies are those imposed just on property owners within the designated area to provide specialized services.

About 6,770 households were in an SSA, according to village records. That’s out of about 10,000 households in Lake in the Hills. Several SSAs were created in the 1990s and 2000s, when the village was experiencing residential growth.

The village will need to raise its levy by about $500,000 to absorb the special service expenditures, but staff recommended raising it incrementally over the next three years.

This year’s $163,420 increase would be about 3%, and would equate to about $5.40 more in taxes for every $100,000 of home value, Andrews said in the spring.

In Lake in the Hills, the grocery tax brought in an estimated $1.2 million in revenue in 2024, officials said.

Village staff wrote in a memo to the board that losing that grocery tax revenue could affect capital improvements and, in future years, operating funds.