Northwest Herald

McHenry joins other towns in keeping ‘very important’ grocery tax that state ending

Ald. Bassi votes no, suggests looking for other revenue options

Ron Looze Sr., of Pell Lake, Wisconsin, shops for rutabagas Thursday, Nov. 17, 2022, at Angelo's Fresh Market, 4400 W. Elm St. in McHenry. Many small independent grocery stores are struggling with labor and rising food costs.

McHenry is among the latest towns to enact a grocery tax after the state's is set to expire. (Gregory Shaver — gshaver@shawmedia.com/Gregory Shaver for Shaw Media )

By Janelle Walker

McHenry’s City Council this week joined hundreds of towns across Illinois in voting to keep a grocery sales tax.

Alderwoman Chris Bassi, Ward 4, was the sole dissenting vote against imposing the 1% municipal grocery tax, effective Jan. 1, 2026.

Instead of continuing to charge the tax – currently collected by the state and redistributed to municipalities – Bassi suggested McHenry look at other options, including increasing the hotel/motel tax from 5% to 7% or adding a 5% tax on amusements like concerts at Petersen Park.

McHenry can look for alternative revenues, too, and remove the sales tax later, City Administrator Suzanne Ostrovsky said, but must approve the tax by Oct. 1 to continue receiving it in January. That deadline was set by the Illinois General Assembly when it decided to allow cities to decide whether not to collect the tax.

Before Jan. 1, the state collected the tax and forwarded the receipts on to municipalities automatically.

No one wants to be the person to add another tax, Second Ward Alderman Andy Glab said, but “if we take off the 1% we will have to look for the revenue somewhere else.”

And he doesn’t want McHenry to have to add $1 million in the property tax levy to make up for what the city would lose without the grocery tax, Glab said.

McHenry finance director Carolyn Lynch wrote in her memo to the Council: “It is important to note that the implementation of this ordinance will not raise taxes but instead will reaffirm a very important existing revenue source that the City of McHenry is currently receiving and reliant upon for its operations.”

McHenry has historically received $1 million a year from the grocery tax, Lynch added. If McHenry chose not to charge the tax, Council would need to cut programs or staff, or find alternative revenue sources.

Most municipalities will keep the sales tax, Ostrovsky told the McHenry Council during budget discussions, so people won’t be just cross into another town to do their grocery shopping.

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Janelle Walker

Janelle Walker

Originally from North Dakota, Janelle covered the suburbs and collar counties for nearly 20 years before taking a career break to work in content marketing. She is excited to be back in the newsroom.