Aurora is considering doubling its hotel room tax rate, which has not risen since it was first adopted in 1987.
The city’s Hotel Occupancy Tax rate is currently set at 3%, but many nearby communities have higher rates that are similar to what is being proposed, according to Chief Financial Officer Chris Minick. He estimates that the proposed 6% rate would bring in an additional $1.1 million for the city each year, especially after the opening of the new $360 million Hollywood Casino-Aurora resort.
The proposal is set to go before the Aurora City Council for final approval at its upcoming meeting on Tuesday, when the council is also set to consider extending a 1% tax on groceries that would otherwise expire statewide at the end of this year.
There are currently around 635 hotel rooms within city limits, with an extra 220 expected to come from the new casino resort, Minick told the City Council’s Committee of the Whole at its meeting last Tuesday. At its current rate and number of hotel rooms, the city brings in between $550,000 and $585,000 each year, he said.
That money mostly goes into the city’s General Fund to offset operational costs, Minick said, but the city also uses around $225,000 per year to support the Aurora Area Convention and Visitors Bureau.
The proposed increase of this particular tax has a number of benefits, according to Minick. For example, he said that the tax is mainly paid by people who are not residents of Aurora, and it is discretionary.
Plus, people do not typically shop for hotel rooms based on the tax rate, but instead based on how close they are to whatever attraction the person is looking to visit, Minick told the Committee of the Whole. Because of how close hotels in Aurora are to amenities, he expects there to still be significant demand for those rooms, he said.
The Hotel Occupancy Tax only applies to the price of the hotel room itself, not to other costs like room service.
The proposed changes to the tax not only double the rate but would also add a $10 daily flat fee on rooms offered for free, which Minick said is a common practice at casino resorts.
If passed by the Aurora City Council on Tuesday, the new higher rate would go into effect on Jan. 1, 2026. The new Hollywood Casino resort is expected to open in the first half of 2026, according to past reporting.
The proposed Hotel Occupancy Tax rate increase was recommended for approval by the Aurora City Council’s Finance Committee earlier this month, though committee chair Ald. Ted Mesiacos, 3rd Ward, voted against it.
Mesiacos also voted against recommending the local 1% grocery tax for approval at that same meeting. He told The Beacon-News just before Tuesday’s Committee of the Whole meeting that he voted against the grocery tax because it would negatively impact the residents he represents.
Illinois first put in place the 1% grocery tax in 1990 to help fund local governments, but it was repealed by a state bill passed last year. However, that bill allowed cities and villages to set their own tax to replace the statewide one, which Aurora is considering doing.
Gov. JB Pritzker, who signed the bill, has said the statewide grocery tax hurts poorer people in particular because it takes a larger chunk of their income, according to reporting from the Chicago Tribune. For the same reason, Mesiacos said the tax should be reduced for communities like the one he represents.
The grocery tax does not apply to those who receive benefits from the national Supplemental Nutrition Assistance Program, also called SNAP. However, after the Trump administration’s megabill was passed and signed on July 4, many SNAP recipients may receive lesser or no benefits in the near future.
Area elected officials criticized the federal tax and spending bill last week, saying it would hurt local residents.
Aurora currently receives around $4.5 million in revenue through the grocery sales tax each year, and without those funds helping pay for public safety, road maintenance, public works, community programs and environmental services, the city would likely need to look to alternative funding sources or make cuts to services, city officials have said.
And, as pointed out by Ald. Carl Franco, 5th Ward, at Tuesday’s Committee of the Whole meeting, the city has been “painting a picture that we’re fiscally challenged right now.”
Mayor John Laesch has made similar comments about the city’s finances in the past, and even said during his inauguration speech in May that the city is in “serious debt,” that his administration needs to get the city’s “financial house in order” and that residents will likely be seeing a property tax increase.
The grocery tax is a significant piece of funding for the city, Franco said, and asking residents to pay $1 for every $100 they spend on groceries for the city to get millions of dollars each year doesn’t feel like a stretch, especially since other communities are doing the same thing.
Cities and villages have until Oct. 1 to approve the local continuation of the 1% grocery sales tax, which would take effect on Jan. 1, 2026, just after the tax expires statewide. Many nearby communities have already approved local extensions of the tax, including Montgomery, Sugar Grove, North Aurora, Batavia, Geneva and St. Charles, as have others throughout the Chicago area and the state.
Naperville, in contrast, is considering increasing the city’s sales tax to compensate for its lost state grocery tax revenue, according to the Naperville Sun.
rsmith@chicagotribune.com