Although eliminating the statewide tax on groceries will leave a $1 million hole in River Forest’s budget, village officials are expected to institute a local tax on groceries that would offset the loss.
“The village budget would be significantly impacted by the elimination of the grocery tax,” said Matt Walsh, village administrator. “River Forest is fortunate to have several popular grocery stores and we expect approximately $1.1 million in grocery tax revenue each year. Losing that revenue would potentially mean the reduction in services or the replacement of that revenue with other sources, which would have a negative impact on taxpayers.”
River Forest is home to a Jewel Osco store and a Whole Foods Market. Whole Foods officials have already announced an expansion of the River Forest store.
“Fortunately, the state recognized this impact and allowed municipalities to maintain the tax,” Walsh said. “We expect the village board to consider local adoption prior to its expiration.”
Illinois Gov. JB Pritzker introduced elimination of the 1% statewide grocery tax as part of his proposed $52.8 billion budget for fiscal year 2025. Illinois lawmakers supported the move when they approved the $53.1 billion state budget. The change doesn’t take effect until Jan. 1, 2026. Local governments will be able to institute their own 1% tax on groceries without holding a referendum.
Eliminating the grocery tax had municipal leaders led by the Illinois Municipal League complaining that it would hurt their budgets. State leaders were not giving anything up with the change because the tax only went to local governments. The option for municipalities to add their own tax was a compromise.
Illinois will join 37 other states that don’t have a state grocery tax. It was the only state among the 10 most populated with a grocery tax
“Obviously the governor needed to eliminate the tax statewide,” said Cathy Adduci, village president. “The key is this is not a new tax.”
