A 1% Elgin grocery tax will replace the Illinois grocery tax being phased out by the state, with the $1.2 million in revenue being used to partially fund Elgin’s lead service line replacement program, the Elgin City Council decided Wednesday.
Municipalities around the state have until October to decide on whether to implement a local tax in advance of the state tax that ends on Jan. 1. The provision allowing the local grocery tax was part of the legislation sunsetting the state tax.
Neighboring communities, including Carpentersville, East Dundee, West Dundee, and South Elgin, have also passed ordinances to create the new tax.
City Manager Rick Kozal said that were the city not to adopt the measure or something that would bring in new money, the city budget’s general fund would take the loss. By continuing it, the city will not have to find a new financial source that would impact residents and businesses, he said.
Councilwoman Diana Alfaro said she supported the move “in order not to burden the community by increasing property taxes.”
“I also think there are a lot of hard decisions coming our way given what is happening on the federal level with certain cuts,” Alfaro said. “There (is) a lot of infrastructure work that needs to be done,” and losing $1.2 million a year would definitely affect those plans, she said.
Councilman Steve Thoren agreed, noting that people are already paying the grocery tax so it won’t represent an increase for them. He added that he supported the ongoing plans to use the money for the replacement of lead service lines until the project is completed in 12 years.
Elgin is in year five of its $150 million lead service line replacement program. There are about 10,000 lead service lines in the city; to date, Elgin has replaced about 2,789 lines.
Mayor Dave Kaptain spoke against continuing the grocery tax, saying families are already facing higher electric, gas and grocery costs in addition to other bills that are increasing.
“This is one thing the city of Elgin has a little bit of control over,” Kaptain said.
Losing the grocery tax revenue is not a significant amount when the city has a $370 million budget, he said.
Councilwoman Tish Powell countered that they’re not instituting a tax increase.
“It is not a new tax. It is currently in place now,” Powell said.
Beyond that, it is paid by residents and people coming from outside the city and people who receive SNAP benefits will not be affected by it, she said.
“It’s the best kind of revenue. It’s not property taxes,” she said. “I think it’s shortsighted to think we can afford to give up $1.2 million.”
Gloria Casas is a freelance reporter for The Courier-News.
