With the state’s version of a grocery tax set to expire soon, whether Lake Bluff will join many of its neighboring communities in adopting its own version of the tax is uncertain following a recent discussion of the village board’s finance committee.
Lake Bluff’s finance committee briefly discussed a staff recommendation to implement a local version of the grocery sales tax at its Aug. 25 meeting. Communities throughout the state are facing the same decision following the State of Illinois’ repeal of the statewide grocery tax effective Jan. 1, 2026.
While the state collects the grocery tax funds, revenues are then distributed to the individual municipalities. With the state removing its tax, many communities throughout Illinois are applying a local version of the tax to maintain the revenue stream, stating that consumers will not see any difference in the checkout line.
Lake Bluff receives about $250,000 a year from the grocery tax, which helps fund village services and capital projects, according to Finance Director Bettina O’ Connell. She said the village’s fiscal year 2026 total revenue is now budgeted at nearly $17.9 million, with the grocery tax funds representing approximately 1.4% of the revenue.
While many neighboring communities, including Lake Forest, Highland Park, and Highwood, have adopted the local version, Finance Committee Chairwoman Susan Rider expressed her reluctance for Lake Bluff to take that path, labeling the grocery tax as “regressive.”
“I do want us to look at something different,” Rider said.
She later added, “We could be a proud member of the North Shore community that says we have a zero grocery tax.”
Village Administrator Drew Irvin said the other options to compensate for the lost income if a local grocery tax was not enacted would be a property tax increase, which he said was not likely of interest to the trustees, service cuts, or a home rule sales tax increase.
(Home rule governance allows municipalities greater latitude in making their own decisions regarding policies as long as it does not conflict with state law.)
Lake Bluff has a home rule sales tax of 1 %, which is collected on all goods with the exception of groceries.
O’ Connell said the village collects an average of about $1.5 million per year from the home rule sales tax. She added that of the 215 home rule communities in the state, 91 impose a home rule sales tax of greater than 1 %.
She said enactment of a local grocery tax would have to occur by September 29 to keep a seamless transition in the tax flow.
Looking ahead, Rider requested additional information on what other communities are doing with their home rule sales tax funds, along with additional village board discussion.
Irvin said the board is set to have another conversation on the topic at a Sept. 8 Committee of the Whole meeting. He said he was not disappointed that the finance committee did not approve the staff recommendation since most of the finance committee meeting focused on police pension funding.
“They barely had a chance to talk about and they are going to take it up at the next meeting,” he noted.
Separately, the village board did not take up the issue of implementing new regulations on the use of e-bikes and e-scooters as originally scheduled to do at the Aug. 28 meeting.
Irvin said the draft language for the ordinance is still being finalized but he anticipates it will be on the agenda at the Sept. 8 village board meeting.
Daniel I. Dorfman is a freelance reporter for Pioneer Press.