Lake in the Hills is the among the latest area municipalities to retain the grocery tax.

Illinois lawmakers and Gov. JB Pritzker opted to get rid of the 1% statewide grocery tax effective Jan. 1. But local communities, who benefited, were given the chance to enact their own by October. Hundreds of towns throughout the state have done so.

The Lake in the Hills Village Board voted unanimously Aug. 28 to keep the tax.

A member of the public weighed in before the vote, saying that is imposing taxes but isn’t reducing the village’s spending.

Village President Ray Bogdanowski responded officials would be happy to give more details and deferred to Village Administrator Shannon Andrews.

Andrews said Lake in the Hills has kept its property tax levy flat for the past 15 years, which has made the village very reliant on other sources of revenue. Andrews added the grocery tax wasn’t new, and “it’s really the restoration of what we have become dependent on in lieu of that property tax.”

Though the levy has been flat for a decade and a half, it is expected to increase this year after the village board voted in the spring to get rid of special service areas. Special service levies are those imposed just on property owners within the designated area to provide specialized services.

About 6,770 households were in an SSA, according to village records. That’s out of about 10,000 households in Lake in the Hills. Several SSAs were created in the 1990s and 2000s, when the village was experiencing residential growth.

The village will need to raise its levy by about $500,000 to absorb the special service expenditures, but staff recommended to raise it incrementally over the next three years.

This year’s $163,420 increase would be about 3%, and would equate to about $5.40 more in taxes for every $100,000 of home value, Andrews said in the spring.

In Lake in the Hills, the grocery tax brought in an estimated $1.2 million in revenues in 2024, officials said.

Village staff wrote in a memo to the board that losing that grocery tax revenue could affect capital improvements and, in future years, operating funds.

As of Aug. 27, about 465 communities in Illinois had opted to keep the grocery tax out of about 1,300 municipalities in the state.

Municipalities that want to add the tax back have to act fast. Village boards and city councils have to pass an ordinance to keep the tax on the books and send a certified copy to the Illinois Department of Revenue by Oct. 1.

In addition to the grocery tax, Lake in the Hills has a 1% home rule sales tax on general merchandise, according to the village website.

In a recent strategy meeting, the village board discussed projects officials want to work on in the coming years. They also discussed possible ways to generate more revenues, including increasing the tax on cannabis dispensaries, adding a capital improvement fee to water bills and potentially increasing the home rule sales tax. Lake in the Hills’ total sales tax is 8.25%.

In Crystal Lake, the city opted to raise its sales tax in 2024 and officials said at the time it was in lieu of the grocery tax.

Many other McHenry County municipalities, including Algonquin, Cary, McHenry, Woodstock, Johnsburg and Huntley, among others, have opted to keep the grocery tax.