The Lake Bluff Village Board has decided, at least for now, not to impose any new taxes despite an estimated $250,000 annual revenue loss from the state’s discontinuation of the grocery tax.
On Sept. 29, trustees voted 3–2 against creating a local grocery tax or raising the existing home rule sales tax. The decision came as the State of Illinois prepares to eliminate its 1% grocery tax at the end of the year — a revenue stream that the state had collected and redistributed to municipalities. Lake Bluff had received about $250,000 annually from the tax, according to village officials.
Neighboring communities, including Lake Forest, Highland Park, and Deerfield, have approved local versions of the grocery tax to offset the loss, while Gurnee and Mundelein opted not to take similar action. With the state’s version set to expire Jan. 1, Lake Bluff needed to act by Oct. 1 to ensure a seamless transition if it had wanted to maintain that revenue source.
After discussion at the Committee of the Whole meeting, trustees voted against the tax at the subsequent board meeting, where one seat is vacant following the August resignation of Trustee Stephen Rappin.
Some trustees argued against the creation of a local grocery tax, fearing economic hardship for some residents.
“There are a whole host of families in our community — even though they might not be seen by everyone — that are just on the cusp,” Trustee Katharine Hatch said. “I can’t do another tax. We do tax after tax after tax after the property levy. This has been taken away, I believe, for the right purposes.”
Trustee Taryn Fisher, who also voted against the tax, offered a similar perspective.
“I really like the idea — even if it is symbolic — of keeping groceries affordable and accessible,” she said.
But there were proponents of creating a local version of the grocery tax to maintain the revenue stream.
Trustee Susan Rider, who previously spoke out against the grocery tax, labeling it “regressive,” said she now believes implementing the local version of the tax is acceptable. She voted for keeping it on the books at least for the next several months, with the possibility of expiration next year.
“I think the status quo is now acceptable to me as being the better of the options to us,” Rider said.
The decision leaves the village forgoing the revenue even as it faces an estimated $10 million to $15 million in capital projects over the next five years, according to Finance Director Bettina O’Connell.
Trustee Shana Fried, who supported implementing the local grocery tax, said the village cannot afford to lose revenue amid those needs.
“We can’t afford to be making cuts at this time to our tax revenue, given the crucial projects we have,” Fried said.
At a previous meeting, trustees discussed the possibility of increasing the home rule sales tax from 1 % to 1.25 %, a move estimated to generate an additional $300,000 to $350,000. However, no trustee moved to introduce that measure.
Some trustees noted that growth in other revenue streams could help offset the shortfall. General sales tax revenues have risen by 4.34 % over the past five years, O’Connell said. Home rule sales tax revenues (which are separate) have also increased in that period.
“I do believe we can make up the gap in that way,” Trustee Raffi Elchemmas said.
But Rider was not convinced.
“While I agree the trajectory of the sales tax has been encouraging and there is reason to hope we don’t need to tax the groceries as we had talked about, I also know we have millions of dollars of projects that we have coming,” she said.
Village Administrator Drew Irvin also warned that construction costs and market conditions could change, increasing pressure on village finances.
“Everything goes up—prices don’t go down. That’s certainly been the case in anything related to construction,” Irvin said.
He added that about one-third of the village’s general fund revenue comes from sales taxes, two-thirds of which are tied to auto sales.
“There are a lot of eggs in that basket,” Irvin said. “There are ebbs and flows in that market. Diversification of revenue is an important thing to do.”
Earlier in the meeting, Irvin noted that the village’s Business Advisory Ad Hoc Committee had endorsed the creation of a local grocery tax. Co-chairman Mark Dewart declined to comment on the board’s decision after the meeting.
Trustees indicated they could revisit the issue in the future. O’Connell said after the village could take action on either home rule sales tax or grocery by April 1, 2026, with any new tax becoming effective July 1.
Daniel I. Dorfman is a freelance reporter for Pioneer Press.