As the deadline to consider a city-specific grocery tax approaches, Mayor Brandon Johnson is advocating for the continuation of a tax that state lawmakers voted to eliminate in 2026.
Last year, the Illinois General Assembly approved a plan to phase out the 1 percent statewide grocery tax as part of Gov. JB Pritzker’s budget initiative for 2025, with the repeal set to take effect on January 1, 2026.
However, the legislation also permits local governments to impose their own grocery taxes. More than 200 municipalities in Illinois have already opted to do so, according to the mayor’s budget team, which presented this information during a meeting of the City Council’s revenue subcommittee.
With the looming deadline for enacting a local grocery tax, Mayor Johnson and his budget officials have expressed urgency in maintaining this revenue source. The City Council’s next meeting is in September, and they will not convene during August, creating a tight timeframe for passing necessary ordinances.
Failure to collect the grocery tax could result in a loss of over $70 million in revenue for the city, raising significant concerns about balancing the forthcoming budget.
At a press briefing, Johnson underscored, “The city of Chicago will not enact its own grocery tax. The grocery tax already exists. There is a process in which the collection of the grocery tax is now being placed in the responsibility of municipalities.”
The mayor’s call for continuing the grocery tax arises in the context of a projected budget deficit of $1.1 billion for the year 2026, which could increase as fiscal evaluations proceed. Last year, Johnson’s administration managed to address a $982 million deficit for the 2025 budget, although they faced criticism for transparency and the late start to the budget discussions.
Johnson’s earlier proposal to implement a $300 million property tax was unanimously rejected by the City Council in November, adding to the urgency of finding alternative revenue streams.
The scope of the grocery tax is limited to food “prepared for consumption off the premises where it is sold,” and notably, it does not affect purchases made with SNAP benefits.
At the City Council meeting, Budget Director Annette Guzman warned that city services could face cuts if the grocery tax is not reaffirmed by the state’s impending deadline.
Guzman stated, “Allowing that tax to lapse in January 2026 would cost the corporate fund an estimated $80 million next year alone, further exacerbating our $1 billion-plus gap.”
She emphasized that nearly 200 municipalities in Illinois have already voted to extend such a grocery tax, highlighting the necessity for Chicago to follow suit to prevent reductions in essential city services.
Alderman William Hall, chair of the revenue subcommittee and a supporter of the mayor, affirmed that a grocery tax ordinance will likely be presented to the City Council during the summer months.
Following the meeting, Hall criticized state lawmakers for what he termed “headline budgeting,” alleging they passed the responsibility for the grocery tax onto local governments to garner political favor.
“They’re using headlines as a means to justify a lack of true budgeteering and balancing of a budget,” Hall remarked.
He insisted that the city requires $80 million, stating, “There’s no ifs, ands or buts about it.” He also noted that discussions on the actual rates of taxation and its fairness would need to be addressed, but there is a clear need to implement the tax to support Chicago’s economy.
Alderman Andre Vasquez, who attended the revenue subcommittee meeting, echoed concerns about the state’s decision to push the onus of the grocery tax onto the municipalities.
Yet, he remains cautious about supporting the continuation of the tax.
He stated, “If you haven’t shown people that you’re willing to tighten the belt at all, it becomes a lot harder to make that ask of the public.”
Vasquez referenced past experiences with unpopular taxation measures, such as the soda tax, suggesting that public sentiment around the grocery tax could be similarly negative.
With the deadline for city action approaching, the mayor and his team face a significant challenge in justifying this tax to the public, particularly in the context of the city’s broader fiscal health.
image source from：https://blockclubchicago.org/2025/06/04/chicagos-grocery-tax-was-slated-to-end-in-2026-now-mayor-wants-to-keep-it-going/
