Now that Illinois Gov. J.B. Pritzker’s $53.1 billion budget for 2025 has eliminated the state grocery store tax, Oak Park stands to lose about $1 million in revenue per year.
Revenue from the 1% state grocery tax was distributed to local municipalities. The cut takes effect Jan. 1, 2026.
Over the last four years, Oak Park has made about $4.3 million in revenue from the state grocery tax, according to Arlene Pedraza, the village’s management analyst.
However, villages, cities and towns have options to cover lost funds. According to the state, municipalities can create their own grocery tax up to 1%. Those with home rule authority, or municipalities with more than 25,000 residents, can pass their own grocery tax without state oversight.
Oak Park does have home rule status, as a municipality with about 52,000 residents. But Donna Gayden, Oak Park’s interim chief financial officer, said they are not planning to raise taxes to make up for the lost revenue.
Meanwhile, in Forest Park, the amount of revenue lost is smaller but still a blow to a much smaller community.
“It’s still not great that this has been eliminated because it’s going to put the burden on the municipalities,” said Maria Maxham, Forest Park’s commissioner of accounts and finance.
Maxham added that she expects Forest Park to implement its own local tax, especially with the arrival of a new grocery store. An Aldi is expected to open later this year in the former Bed Bath and Beyond building at 215 S. Harlem Ave. So, when Pritzker proposed eliminating the grocery tax in February, Forest Park officials were disappointed, Maxham added.
But Gayden said she wasn’t surprised.
“Once something is passed through legislation, the local municipalities, we just have to adjust,” Gayden said. “We will try to fight what we can and convince them not to do it, but we will adjust and move forward.”
Gayden said she anticipates modifying the village’s budget and looking for ways to reduce spending but didn’t know where yet. However, the fiscal year 2024 budget for Oak Park had a lot of one-time expenditures, she said, that would not necessarily affect the 2025 budget.
“At this time, we will look at additional grants coming in, additional funding from other sources without raising taxes,” Gayden said.
Illinois was one of 13 states that taxed grocery sales. Pritzker proposed eliminating the grocery tax to save families money. Dropping the 1% tax saves Illinois shoppers $1 for every $100 of groceries.
“I don’t think there’s any benefit to getting rid of it,” Maxham said. “It’s obviously going to save people who grocery shop, which is everybody, money,” but the amount, she added, is insignificant.
“It tends to have a smaller impact on a person buying $100 worth of groceries than it does on a municipality as a whole, that’s losing out on a significant chunk of money that they use for all kinds of different things,” Maxham said.
Oak Park will likely approve its fiscal year 2025 budget around December of this year. Pedraza said they couldn’t say yet whether the loss of the state grocery tax revenue would result in a deficit for the village.