‘Do it now or it’s gone’: Libertyville joins most others in enacting local grocery tax
Libertyville will join an overwhelming majority of communities replacing the state grocery tax with a local version starting Jan. 1, but the decision came with a spirited give and take.
The 1% state sales tax collected on groceries is being eliminated and communities have been given authority to enact their own to replace it.
Those who choose to do so must submit an approved ordinance to the Illinois Department of Revenue by Oct. 1 for the transition to be seamless. There also is a filing deadline of April 1, for implementation July 1, 2026, but doing that means missing six months of revenue.
The potential loss of a reliable revenue source has been the chief consideration for an overwhelming number of communities deciding to pick up where the state leaves off.
A familiar observation from local officials is they aren’t enacting a new tax but allowing an existing one to continue.
In Libertyville, the grocery tax generates as much as $850,000 annually.
During public comment Tuesday, former trustee Matthew Hickey argued against a grocery tax. Rather than run for reelection last April Hickey unsuccessfully challenged Mayor Donna Johnson.
He said the village has budget surplus of $6.5 million and a rainy-day fund of $13.3 million. Approving what he called Johnson's grocery tax would be the wrong choice, he said.
“You don’t need this tax,” Hickey said.
Johnson countered it wasn’t her tax and to be fiscally responsible, the full board needed to assess factors such as potential additional unfunded mandates from Springfield to determine the impact of losing $850,000 each year.
Trustee Matt Krummick said the village as a small nonhome-rule community would be hard-pressed to offset the loss.
“We need what we need and I think at this point it would be foolish to not continue with the grocery tax.” he said.
“This is our one chance to make sure that we continue to do what’s right by our residents and make sure that our budget can handle and deliver the service you’ve become accustomed to,” said Trustee Casey Rooney.
Trustee Pete Garrity said the state gave the village no recourse but to “use it or lose it” in terms of enacting a local grocery tax and isn’t allowing modifications.
The village has various ongoing capital needs that will require significant borrowing, he added.
“Short term, yeah, you’re right Matt (Hickey) — we could get by for some period of time but you’ve got the unknowns and we can’t revisit this,” he said. “It’s do it now or it’s gone.”
Trustee Kara Macdonald said she waffled on a decision but cited a recent poll showing most Americans are worried about the cost of groceries “and we still haven’t seen the impact of tariffs.”
She suggested foregoing six months of revenue to reassess before the April 1 deadline.
Garrity apparently agreed with that and with Macdonald opposed the ordinance.
Trustees Krummick, Rooney, Scott Adams and Andrew Herrmann voted in favor.