Now that Gov. JB Pritzker’s $53.1 billion budget for 2025 has eliminated the state grocery store tax, Forest Park stands to lose about $400,000.
Revenue from the 1% state grocery tax was distributed to local municipalities. The cut takes effect Jan. 1, 2026.
“To some towns, a few hundred thousand dollars isn’t significant, but to us it’s a lot,” said Maria Maxham, the village’s commissioner of accounts and finance. “It’s a large sum of money.”
However, villages, cities and towns have options to cover lost funds. They won’t, for example, have to cut costs or raise property taxes to account for lost revenue. According to the state, municipalities can create their own grocery tax.
Village Administrator Rachell Entler said that both non-home rule municipalities and those with home rule authority, or municipalities with more than 25,000 residents, will be able to establish a local grocery tax without putting a referendum on the ballot. Forest Park, she said, would be able to create up to a 2% tax on groceries without a local vote.
Maxham, however, said she still isn’t in favor of getting rid of the state tax.
“It’s still not great that this has been eliminated because it’s going to put the burden on the municipalities,” Maxham said. She added that she expects Forest Park to implement its own local tax, especially with the arrival of a new grocery store in town.
“We were really excited about Aldi because it’s a great store, but also because it would be another source of revenue for us,” Maxham said. So when Pritzker proposed eliminating the grocery tax in February, village officials were disappointed, Maxham added.
Pritzker’s announcement was especially relevant as Forest Park finalizes next year’s budget this summer. The village is ending the 2024 fiscal year with an $11 million deficit, and its expenditures have exceeded revenues for over a decade.
So it was a relief when the state declared municipalities could issue a local tax.
“It looks like it’s not going to be as bad or as difficult as we originally had anticipated,” Maxham said.
Still, that doesn’t mean she supports the tax removal, Maxham added.
Illinois was one of 13 states that taxed grocery sales. Pritzker proposed eliminating the grocery tax to save families money. Dropping the 1% tax saves Illinois shoppers $1 for every $100 of groceries.
“I don’t think there’s any benefit to getting rid of it,” Maxham said. “It’s obviously going to save people who grocery shop, which is everybody, money,” but the amount, she added, is fairly insignificant.
“It tends to have a smaller impact on a person buying $100 worth of groceries than it does on a municipality as a whole, that’s losing out on a significant chunk of money that they use for all kinds of different things,” Maxham said.
Correction, June 11, 2024, 12 p.m.: An earlier version of this article said that, because Forest Park doesn’t have home rule status, the village would likely need to put a local grocery tax referendum on a ballot for voters. Since publication, new information supplied confirms that neither home rule or non-home rule municipalities will need to pass a referendum to establish a local grocery tax.