Less than two months away from the state’s deadline, Oak Park has decided to impose a 1% tax on groceries to replace the identical state tax that Illinois eliminated last year.
An ordinance ratifying the local tax was included on the consent agenda for the Aug. 5 Oak Park village board meeting following a discussion of the matter at a July 31 finance committee meeting. The new tax will not be discussed by the full board at the Aug. 5 meeting, as the board manages a packed regular agenda including discussions on Flock safety’s license plate reading cameras, the Oak Park Avenue streetscaping project, zoning reform and more, according to village documents.
Village staff advocated for the village to ratify a replacement tax as Interim CFO Donna Gayden said Oak Park would face a budget shortfall of as much as $1.4 million if it did not replace the scrapped state tax.
“If we do not pass the ordinance, that would be a shortfall in the budget for revenue that we have to look for elsewhere,” she said.
Illinois’ grocery tax disappears Jan. 1, 2026. The state gave municipalities an October 1 deadline to decide if they would ratify replacement taxes.
Gayden said the resident impact of the tax is estimated at about $65 per household each year, but that that number is likely inflated by non-residents who shop at Oak Park grocery stores.
The village cannot afford to lose out on that source of revenue right now as other streams look less stable, village leaders said last week. Leaders acknowledged that it is a “regressive tax,” meaning it would disproportionately impact lower income residents.
Village President Vicki Scaman had campaigned against implementing such a tax ahead of April 1’s municipal election but begrudgingly supported ratifying the measure as a present necessity.
“This is challenging for me because I had wanted to work to not need to do this,” Scaman said. “When I was campaigning for reelection I answered this question by saying ‘I would try not to have to do it’ and what I’m sharing today is that with the climate at the federal level and the insecurity around certain grants or whether some of them will even exist in the future, I don’t have that. I am afraid that by not collecting it this gap would actually cause a greater financial burden to our residents. But I am not happy about it. So, we would hope to not be in this situation forever and that we would see grant opportunities grow and not be diminished in the future.”
Scaman said that the state missed an opportunity by not helping provide a clear alternative that would’ve allowed more towns to move forward without replacing the tax.
The village could move to repeal the tax in the future.
Trustee Brian Straw said that the tax is needed, but that the village needs to be proactive in supporting organizations that fight food insecurity in and around Oak Park.
“Can we earmark additional funding from the grocery tax that we take in to combating issues of food insecurity, because part of the policy reasoning behind eliminating the grocery tax is around food insecurity,” Straw said. “It is something to consider, to address some of the concerns around implementing this regressive tax. Pretty much all of the taxation levers we have in municipal government are regressive tax levers. Property tax is regressive, sales tax is regressive. Most of our revenue levers are regressive in nature and one of the ways we combat that is when we have to implement a regressive tax looking at the effect of that regressive tax and maybe allocating some portion of that funding to combating effects of the regressive nature of that tax.”
People who receive federal SNAP food benefits have not paid the state tax on SNAP eligible items and will not be subject to the Oak Park tax, Gayden said.
Most of Oak Park’s surrounding communities have ratified grocery replacement taxes, including Berwyn, Cicero, Brookfield and Forest Park. The village of Riverside declined to impose a replacement tax last month, but the town only has one grocery store and collects about half as much tax on grocery sales in a decade as Oak Park does in one year.
The city of Chicago has not yet decided on if it will enact the replacement tax. Chicago Mayor Brandon Johnson has campaigned in favor of the tax, with his administration saying the city would stand to lose $80 million.
