Facing the loss of about $250,000 in annual revenue, some Lake Bluff trustees are leaning toward raising the village’s home rule sales tax rather than enacting a new local grocery tax.
The discussion comes as the State of Illinois will discontinue its 1% grocery sales tax on Jan. 1. For years, the state collected the tax and redistributed the funds to municipalities. To offset the loss, several nearby communities — including Lake Forest, Deerfield, and Highland Park — have adopted their own local grocery tax. Others, such as Gurnee and Mundelein, have chosen different approaches.
Lake Bluff officials revisited the issue at a Sept. 8 Committee of the Whole meeting. Some trustees present expressed support for raising the home rule sales tax from 1% to 1.25%. The increase would apply to most merchandise except groceries, prescription drugs, and licensed vehicles.
Village staff estimated a quarter-percent hike in the home rule sales tax would generate about $330,000 annually — roughly $80,000 more than the village currently receives from grocery tax revenues.
Trustee Susan Rider, chair of the finance committee, called the grocery tax “regressive” at an earlier meeting and backed the home rule increase.
“It is more optional to buy a lamp than a package of bread,” she said.
Trustee Shana Fried agreed, noting the sales tax applies to more discretionary spending.
Village staff previously recommended enacting a grocery tax.
“It is a very reliable source of income for communities, meaning it is going to show up, it is going to be there, and you can predict it with pretty good accuracy,” Village Administrator Drew Irvin said on Sept. 8.
But that does not seem the approach favored by trustees.
“It’s a policy decision by the board,” Irvin said after the meeting.
Staff outlined other options to offset the loss, including raising property taxes or cutting services, but trustees dismissed both.
The board has not yet made a final decision. Only three trustees, plus Village President Regis Charlot, were present for the Sept. 8 Committee of the Whole meeting. Charlot said he wants input from other members before a vote.
The issue is scheduled to appear on the agenda for both the Sept. 22 Committee of the Whole meeting and the regular board meeting that evening, Irvin said.
For the village to implement its own grocery tax without a revenue gap, trustees would need to approve it on Sept. 22 to meet state filing deadlines. However, both Charlot and Trustee Taryn Fisher have said they will be absent from that meeting, potentially delaying a final decision.
Daniel I. Dorfman is a freelance reporter for Pioneer Press.
