The Naperville City Council reversed course Tuesday on how it would replace the lost income from the soon-to-be-defunct state grocery tax, abandoning plans to increase the city’s home rule tax in favor of a local 1% grocery tax.
Councilman Benny White, who previously supported increasing the home rule sales tax to compensate for the $6.5 million loss in state grocery tax money, said he had a change of heart after concluding a hike in the sales tax would place a heavier burden on local business owners and those struggling to afford items like diapers and basic cleaning supplies.
“In my opinion, the grocery tax, by keeping it where it is … I think it doesn’t affect our residents,” White said. “I think they’re used to paying that particular tax so to have our businesses pick up the slack, I’m struggling with that.”
The council had been scheduled to take a final vote on escalating the city’s sales tax before a motion was made to swap it with the local grocery tax.
Last month, the council voted 5-4 to raise the city’s sales tax by 0.25%, which it can do without voter approval because it is a home rule municipality. The tax increase would have applied to restaurant meals and store purchases, including clothing, electronics and personal care products.
By increasing the home rule sales tax, the city also would have been required to decrease the downtown food and beverage tax by the same percentage, per a city ordinance. Naperville’s current downtown food and beverage tax is 1.75%.
Gov. JB Pritzker repealed Illinois’ 1% grocery tax last year, saying it hit poorer families harder than others. However, because revenue from the tax goes directly to municipal governments rather than to the state government, towns were granted the ability to levy their own 1% tax on groceries by Oct. 1. Many communities in Illinois have already opted to implement a local grocery tax.
Finding a replacement for the state-wide grocery tax is crucial for Naperville, which collects $6.5 million annually from the income source.
Naperville Finance Director Raymond Munch said at a previous council meeting that the grocery tax and the home rule sales tax currently bring in about the same amount of revenue, but the local grocery tax is a more stable form of revenue.
The vote on reinstating the local grocery tax was 5-4, with Mayor Scott Wehrli and council members Josh McBroom, Nate Wilson and Allison Longenbaugh joining White in voting yes.
Council members Ian Holzhauer, Ashfaq Syed, Mary Gibson and Patrick Kelly voted against it.
Holzhauer reiterated the same points he made at last month’s council meeting, emphasizing that a grocery tax combined with cuts to the Supplemental Nutrition Assistance Program (SNAP) under President Trump’s tax bill could harm people who are already struggling.
City staff previously noted that SNAP recipients would not feel the effects of the grocery tax, but would see the impact of a home rule sales tax increase.
“There is only so far that we can push that social safety net before it breaks,” Holzhauer said. “If we have the opportunity to take a vote to make food more affordable for people whose lives just got a lot harder, I think we need to do that.”
McBroom, however, argued that the volatility of the home rule sales tax could put people at risk by impacting essential city services should it bring in less money than expected.
“If we’re worried about vulnerable people, vulnerable people need police, vulnerable people need fire departments to come to their neighborhood,” McBroom said. “We are going to have an economic contraction at some point, and that’s going to put a future city council in an impossible political position to raise property taxes to pay for our essential services.”
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McBroom also serves as the liaison to the Naperville Financial Advisory Board, which voted 5-1 in May to recommend the adoption of the grocery tax over increasing the home rule sales tax.