The Evanston City Council voted preliminarily last week to create a 1% grocery tax in order to avoid a property tax or cuts in city services when the state tax expires at the end of this year. Without the grocery tax, which Mayor Daniel Biss has said he will veto, the city would lose an estimated $2.5 million in revenue per year, sources said.
Evanston joins a growing number of Illinois municipalities that have voted to implement a grocery tax after Gov. JB Pritzker signed a bill that eliminated the state tax but allowed municipalities to create a tax of their own to make up for the lost revenue.
Since August, more than 450 municipalities have created a tax of their own, according to Evanston city staff. Skokie, Northbrook, Glenview and Morton Grove are among them.
The City Council voted 5-3 to create the tax, with City Councilmembers Claire Kelly, Parielle Davis and Matt Rodgers dissenting and Bobby Burns absent.
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Previously, City Council members had expressed hesitation about creating a tax, but city staff presented information at an August meeting saying that if the city were to lose the grocery tax revenue, it would need to either pass a property tax hike, raise the city’s sales tax or cut city services. That swayed some Councilmembers to direct city staff to advance plans for the grocery tax.
Mayor Daniel Biss told Pioneer Press he plans to veto the measure at the upcoming Sept. 29 City Council meeting, which is when the Council will take its final vote on the matter.
The City Council can override the mayor’s veto with a two-thirds majority vote, meaning that at least six Councilmembers would need to vote to approve the grocery tax.
The City Council voted with little discussion on the matter on Monday, Sept. 15, though they had previously deliberated at length with city staff at the Aug. 25 City Council meeting. The city’s Deputy CFO Clayton Black said the tax generates $2.5 million for the city. Black said the tax is a “critical source of revenue” for the city’s general fund as the city prepares to head into next year’s budget season.
Black said a little over half of grocery sales in Evanston come from non-residents. “Eighty-three percent of the shoppers at the Jewel-Osco on Howard Street are from outside Evanston, about 40% of the shoppers at the Whole Foods on Green Bay Road are from outside Evanston,” Black said.
City Councilmembers who approved the tax expressed mixed emotions. “While the grocery tax is regressive, it’s kind of the best option we have,” said 4th Ward City Councilmember Jonathan Nieuwsma.
Eighth Ward City Councilmember Matt Rodgers said he was in favor of increasing the city’s sales tax, “which taxes (purchases) regressively, but it’s on items that aren’t necessarily the necessities of life,” because the tax doesn’t apply to medicine or food.
Biss shared his views. “I can’t support this… this is a deeply, deeply regressive tax,” he said.
“We all know how important it is to restrain our property tax to the extent possible, but the property tax is a much less regressive tax than a grocery tax,” Biss said.