Aldermen to hear presentation from Mays at Feb. 18 meeting about possible 1 percent local grocery tax

QUINCY — Director of Administrative Services Jeff Mays promises he’ll have a brief presentation for the Feb. 18 meeting of the Quincy City Council that goes into the history of the state grocery tax, what kind of revenues the city has received from it and what kind of revenue impacts it may have if the city doesn’t implement its own grocery tax.

The Finance Committee voted on Feb. 3 to send to aldermen a proposal — with no recommendation — to implement a locally-imposed 1 percent grocery sales tax by ordinance. The state of Illinois passed Public Act 103-0781, which repeals the statewide tax on groceries beginning Jan. 1, 2026. 

If municipalities want to implement the tax locally, a certified copy of the ordinance must be submitted to the Illinois Department of Revenue by Oct. 10 for the tax to be imposed — with no lapse in revenues — beginning Jan. 1, 2026. 

Aldermen got their first reading of an ordinance that would create the local tax. Greg Fletcher (R-1) asked why the ordinance was created without aldermen discussing it first.

“I don’t sit on the Finance Committee, but I was there last week, and I guess I’m confused,” he said. “I just need clarification. I don’t think that came out of finance looking for an ordinance being drafted. I thought it came out of finance just looking for discussion, so I guess I’m confused why I’m looking at this the way it is.”

“We need to discuss it. We do,” Mike Rein (R-5) said. “Our discussion needs to be separate from an ordinance. That’s fine. I never believed it would be an ordinance, but I do believe we need to discuss it and just share the thoughts. We did not have a recommendation coming out of finance, but I do think we need to discuss it tonight with this tax.”

Comptroller Sheri Ray asked last week for the Finance Committee to take action immediately because she is preparing revenue projections for the fiscal year from May 1, 2025, to April 30, 2026. If grocery tax is not extended, she believes the city will need to account for a reduction of approximately $400,000 in revenue (from January through April) in the next fiscal year budget.

Mays said the ordinance needs three readings, putting the vote on the agenda for Feb. 24 — which will be Mays’ last meeting before he retires — while allowing Ray to plan the budget.

“We are planning to do a revenue presentation on March 4, and to have that presentation in place, we felt it was important to have the discussion and the (grocery tax) ordinance in place one way or the other so that we can make our revenues meet, whatever the outcome of the discussions,” Mays said.

Mays said the state grocery tax currently in place generates about $1.2 million a year of the $12 million that is generated from the home rule sales tax.

Quincy Mayor Mike Troup said that during COVID, people ate out less and ate at home more, so the grocery taxes likely were higher four or five years ago than what they are now.

“Because of the robust growth we’ve had in sales taxes and because of the investment we’ve made to re-establish our retail base here, the sales tax has basically been the general revenue fund that has kept our property taxes from going up,” Mays said. “So if you take the sales tax down, especially out of the base that we currently have, there’s going to be a lot more pressure and a lot less revenue to both fund our pensions to the degree we have as well as keep the property tax rates generally as low as we have.”

Mays said the grocery tax was first implemented in 1981.

“This is a 1 percent sales tax that we’ve had for several years that the state no longer wants to have the authority to levy the tax,” Rein said. “They’re giving cities and municipalities like ours the (opportunity) to levy that tax.”

“This is not creating a new tax,” Jeff Bergman (R-2) said. “This is just a (proposed) continuation of the current tax that is in place.”