By this time next year, Illinois will no longer charge a tax on groceries — a move Gov. JB Pritzker has gone out of his way to highlight, such as in his annual marquee budget address last week when he said “we lowered taxes on parents when we enacted the Child Tax Credit and permanently eliminated the state grocery tax — together saving Illinoisans more than half a billion dollars per year. This year, we are going to need to do even more to address high prices and counteract Trump’s tariffs that will raise taxes on working families.” But Illinois is also giving municipalities the ability to reinstitute the 1% grocery tax locally starting in January, when the state one disappears.
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Municipalities are now asking the state to give them more taxing authority, including for all municipalities’ elected officials to be able to enact a local sales tax on motor fuel to fund road and infrastructure improvements. Currently only non-home rule municipalities within Cook County or that have populations over 100,000 have the ability to pass an ordinance to locally tax gasoline at the pump, up to 3 cents a gallon (
House Bill 1283 ). “The majority of non-home rule municipalities across Illinois lack this authority,” said Matteson Village President Sheila Chalmers-Currin, a municipal league vice president. “I have experienced this challenge firsthand.” She said Matteson had to go through a “lengthy” process to become home rule, so that the board could do so. “Allowing all non-home rule municipalities to implement a local motor fuel tax can save a significant amount of time and resources spent on similar referendum efforts,” she said. “Not having the authority to pass this tax creates a significant financial disparity, limiting critical funding for local roads improvement, transportation projects and infrastructure maintenance.” Being able to tax gas means communities have an alternative to resorting to a property tax increase, Chalmers-Currin said. “This is a perfect example of local government being able to address local problems with a local solution,” Illinois Municipal League CEO Brad Cole said. “As we come out of the winter season — whenever that actually ends up being — we’re going to see road crews fixing up pot holes and repairing roads and bridges and the infrastructure that those citizens rely on. And the person that they’re going to call when then have that pot hole is the mayor or their alderperson. And they’re going to want to know ‘Why haven’t you fixed this?’ For communities that are non-home rule, they don’t have the resources.” Already, the Illinois Fuel & Retail Association, which represents gas stations, is in opposition. Cole points out that with the grocery tax, communities wouldn’t be adding to their coffers — they would be replacing funding that will otherwise go away. While in Springfield on Tuesday to introduce the organization’s agenda for the legislative session, Cole said so far, nearly 60 communities have voted to implement a local grocery tax, though he couldn’t immediately provide a list of which. That number could dramatically increase, however, after the April 1 municipal (or consolidated) elections. Matteson’s Chalmers-Currin said the village will wait for new board members to potentially be elected to make a decision. Municipalities have to vote and send notice to the state revenue department by Oct 1. at the latest in order to not miss any revenue; if they wait, the next chance to begin collecting a tax on groceries would be July 2026. “That’s their choice. The big issue for us was being able to make up that revenue and have the authority to do it,“ Cole said. ”Grocery prices like everything else continue to rise. That 1% tax is not going to make a difference from the price of the eggs that I tried to buy last weekend. And I think that this is a struggle that local officials will have to come to grips with, whether they want to put it on or not.” Cole said municipalities stand to lose “real money” next year, when the state-imposed grocery tax — the proceeds of which currently go straight back to coffers of the municipality where the groceries were purchased — expires. Collectively towns and cities stand to lose between $325-350 million. As a sampling of what it will mean in the Chicago region, according to information the municipal league collected from members last May, suburban Arlington Heights would see a drop of $1.3 million, Bolingbrook $1.75 million, Chicago between $60-$80 million, Geneva $600,000 and Joliet $3 million. Chicago has so far not voted to replace the state’s 1% grocery tax with a city 1% tax on groceries, and Mayor Brandon Johnson has not weighed in either way, but given the city’s tight budget it would be difficult for the city to withstand an $80 million hit. Rather than go the grocery tax route — which per law could only be a 1% tax on foods purchased not for immediate consumption — Champaign chose to instead increase its sales tax starting in 2026, which mayor and municipal league president Deborah Frank Feinen said will bring in more money. Communities like Champaign and Chicago are home rule, which gives them more taxing flexibility. Last year, Illinois lawmakers voted to give the city council and village boards of non-home rule municipalities the ability to adopt a general local sales tax without going to a voter referendum. Cole said the municipal league’s goal is to give local leaders the option to do what’s necessary to make improvements and keep their budgets balanced. “Some communities have decided that they will not impose the (grocery) tax locally when it expires Jan. 1 of 2026, but they have the authority. And that’s the key,” Cole said. “They might not want to impose the tax but if they need to, they have to have the authority.” The Municipal League is also lobbying the General Assembly to lift mandates that require certain public notices be published in newspapers or by mail, and instead alert the public in a less expensive fashion: Posting on a website. Such a change would hurt media outlets, many already struggling financially.
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