Finance Committee sends proposal for local 1 percent grocery tax for City Council to review

QUINCY — The Finance Committee voted Monday night to send to the Quincy City Council 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. 

Comptroller Sheri Ray asked for the Finance Committee to take action now 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.

“If we were to pass the ordinance, which (the Illinois Municipal League) drafted for us, to impose our own grocery tax, it would be a neutral tax,” Ray said. “It would just go from being a state-shared tax to it being locally imposed.”

Ray said the grocery tax collection was a little less than $1.1 million in 2023. The city has collected about $1.16 million from Nov. 1, 2023, to Oct. 31, 2024.

“That’s potentially the amount of money that we’re estimating would be lost if we didn’t try to implement this tax as a locally imposed tax,” she said.

In 2022, an election year, Gov. JB Pritzker proposed a 12-month reduction of the state’s grocery tax from 1% to zero. Funds were increased in the budget for that period to assist local governments impacted by the lost revenue. The tax kicked back in for fiscal year 2024.

When the statewide tax is eliminated, that could mean up to $420 million less from the state to local governments.

“Will the state be prohibited from taking any of this?” Finance Committee chairman Mike Rein asked.

“According to the IML resources, the state will not charge a fee for collecting and remitting this tax,” Ray said.

“When this happened in the past, they felt free to take some of it,” Rein said.

“As part of the negotiations with IML, they would not impose a processing fee. But again, that could be subject to change,” Quincy Mayor Mike Troup said. “Right now, in most communities that are in our boat and have lost (the grocery tax) because of the governor’s edict either have already filed or are in process of filing this proposal.”

Any money collected by the 1 percent grocery tax will be into the city’s general fund.

Ray will have the resolution ready for the first of three readings by the full City Council for its Feb. 10 meeting.

The Finance Committee voted to send with its approval a resolution to the City Council to accept a $10,000 bid from Ryan Sparks with Sparks Home Automation and Real Estate, LLC, to buy a property at 1516 Van Buren. The city of Quincy obtained a judicial dead in April 2024 as part of the city’s fix or flatten program, and a structure on the site was demolished for $18,500 in October 2024.

The 141 feet by 50 feet lot is zoned for single-family residential use. Sparks said he intends to build a 1,700-square-foot home with three bedrooms and two bathrooms within 24 months of the date of closing.

“We appreciate it,” Finance Committee member Richie Reis said. “That house was an eyesore for years.”

“I never saw (the old house), but I did look up some of the old photos on Google,” Sparks said. “It would definitely be a step up. No doubt about that. I think the neighbors will be happy.”

Finally, the Finance Committee voted to repeal an intergovernmental agreement (IGA) with the Quincy Public Library (QPL) dating to Nov. 22, 1994, with annual renewal terms.

Corporation Counsel Lonnie Dunn recognized the language in the 1994 agreement was dated and not fully in practice, so he prepared a draft revision to the IGA and sent it to library officials on Nov. 7, 2024. The library board responded on Thursday with a revision that had one addition that made the Finance Committee bristle.

“The city agrees to fund the QPL’s budget by levying an amount up to or equal to 0.15 percent as specified in Section 3-1 of the Library Act (75 ILCS 5/3-1),” the revision read. “The city will then provide the additional amounts needed in order to fully fund QPL’s budget request, as determined by QPL’s Board of Trustees. … The city may meet those additional needs by an additional ad valorum levy in excess of 0.15%, or subsidy from other sources or a combination of both.”

“To me, this request of the library … that one sentence (about fully funding the library’s budget request) is leaving that completely open,” Finance Committee member Eric Entrup said. 

“It’s not open,” said Jeff Mays, director of administrative services. “If we sign that, then we’re required to fulfill it.”

“That’s what I mean. It’s completely open to any budget they come up with,” Entrup said. “We can’t live like that. It’s like every city department. We can’t guarantee every year we’re going to be able to fill your budget request.”

“For a roof or an air conditioner, if it’s a capital project, that’s one thing,” committee member Jack Holtschlag said. “But as far as operations and the budget, we’re all going to have to tighten our belts. I mean, I’m OK with them bringing it to us. I’m not saying, ‘We can guarantee it.’ If we don’t have the money, we don’t have the money.”

“We’re way apart on just that one sentence,” Mays said. “I don’t know that we can go forward and maintain the flexibility I think the city feels we need to have, given our own budget crunch.”

The city is giving the library $1.3 million through its tax levy and $574,000 in personal property replacement taxes (PPRT) through state statute. Director Kathleen Helsabeck told the committee that a request for an additional $423,000 is to meet the operating costs of the library — salaries, utilities, books, materials and programs.

“Our numbers are staying relatively flat on staff,” Helsabeck said. “I had a big plans for this year, and the PPRT was cut, and so a lot of the staffing plan that I had planned for didn’t happen. I was grateful that I found out early in the year.”