URBANA, Ill. (WCIA) — Governor Pritzker signed a bill on Monday putting an end to the state’s grocery tax. The grocery tax will be checking out at the start of 2026.
It was a move starting back in February seeking to rid the 1% charge on people’s expenses and catching a lot of local governments off guard.
“We didn’t know what was coming until we were well into our budget development,” said Urbana Mayor Diane Marlin. “We had already done our financial forecast.”
Marlin said she started looking for other ways to close the gap from a once guaranteed income of about $1 million dollars.
“Many communities are responding by looking at ways they can replace that revenue,” she added.
Decatur and Danville are both beginning to think about next steps. Decatur will miss out on about $2 million a year, and officials said they will almost certainly talk about ways to replace it; Danville’s mayor says they’re doing the same.
In Champaign, the city council hopes to limit the loss after adding 0.25% to their home rules sales starting in 2026.
“Luckily, the legislature, in the final version of the budget, delayed implementation,” Marlin said.
She said changing the date from January 2025 to 2026 bought everyone more time.
“We’re in a strong enough financial position,” Marlin added. “We didn’t have to respond today so we can think about what our options are and see how things go over the next year.”
Urbana is also dealing with extra expenses.
“Our census population was undercounted, so we’re losing another $750,000 a year due to that,” she said.
Marlin isn’t seeking re-election, and her term will end before they lose the revenue stream, but she said she wants to get it sorted out before she leaves.
“At this point, there aren’t that many options,” Marlin said. “You know, you either raise revenue or cut expenses and we don’t want to do the latter.”
The City of Urbana typically works with about a $50 million general operating fund. Grocery tax revenue makes up a little more than 1% of that.
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