Elected officials across the state are debating whether to implement a 1% local grocery tax to replace the 1% state grocery tax that will be eliminated Jan. 1.
That's because revenue from the state grocery tax is passed to communities. The elimination of the state grocery tax will cost Washington about $500,000 annually, according to city staff.
Washington City Council began its discussion about possibly adopting a local grocery tax Monday. An ordinance must be approved and a certified copy sent to the Illinois Department of Revenue by Oct. 1 for a local grocery tax to go into effect Jan. 1.
Washington Mayor Gary Manier and city council members who expressed support for a local grocery tax pointed out that the state grocery tax has been in effect since 1991, so a local grocery tax would not be a new tax.
"If (the local grocery tax) isn't approved for 2026 and the council decides later to implement it, then it will be a new tax," Manier said.
Alderperson Brian Butler said with major expenses including pension obligations looming, it isn't fiscally prudent for the city to lose the estimated $500,000 annually.
"I don't think anyone is going to do their grocery shopping here because we don't have a local grocery tax," he said. "This is just a ploy by the state to make local officials look like bad guys if we pass a local grocery tax."
Alderperson Mike McIntyre said he believes Washington residents like himself will continue to do their grocery shopping in the city if the local tax is imposed because of the convenience of shopping close to home.
"Also, I don't want to increase the city's sales tax in the future to make up for the revenue shortfall from not having a local grocery tax," he said.
Alderpersons John Blundy and Lilija Stevens said they oppose a local grocery tax because they want to give shoppers a break at a time of soaring grocery prices.
"I understand the temptation of lowering taxes," said Alderperson Bobby Martin III. "But not having a local grocery tax wouldn't help just our residents. It would help residents from other towns around us."
Alderperson Brett Adams called opposition to a local grocery tax "political theater" and a "talking point."
"I'd rather keep the $500,000 a year and improve our roads," he said.
Two Washington city officials expressed their support for a local grocery tax in a memo written for the council.
"This is a reliable revenue source that can assist with expenses such as infrastructure improvements or public safety," reads the memo, written by Jon Oliphant, the city's planning and development director, and Joanie Baxter, the city's finance director.
"Grocery stores in the city are frequented by residents and non-residents," the memo reads. "According to site analytics data, Kroger had approximately 35% of its customers over the past year drive from at least four miles away from the store. They're non-residents.
"City staff suspects this percentage is slightly lower for Lindy's Downtown Market, but higher for Walmart."
Pekin and Normal have approved local grocery taxes. East Peoria Mayor John Kahl told reporters Friday that his city will approve a local grocery tax.
It's estimated that Peoria would lose $4 million annually without a local grocery tax. The East Peoria loss is estimated at $2 million annually.
Good start for residential construction permits
Oliphant had good news to report Monday regarding residential construction in the city.
"City staff has issued 11 residential construction permits and received interest in development on several other lots," he said. "That's more construction activity and interest this early in the year than has happened in several years."
Oliphant also said in his report to the council that inspections continue at the Tangled Roots Craft Beer & Kitchen restaurant on the square.
Manier said with the restaurant's opening getting closer, the city has received interest from four or five businesses looking to open on or near the square.
Here are other highlights of city department heads' reports to the council Monday:
• City Engineer Dennis Carr said a bid opening is scheduled for April 30 for Phase II of the Catherine Street reconstruction project, and land acquisition for sidewalk projects on Grant and North streets has been slowed by "a few residents who have been difficult to negotiate with."
• Police Chief Mike McCoy said Trevor Wise began working as an officer in the city Feb. 24. Wise was a lateral hire from the North Pekin Police Department. The Washington Police Department is now fully staffed with full-time officers, McCoy said.
$50,000 city business improvement grant approved for Nena Ace Hardware
Council approved a $50,000 city business improvement grant for Nena Ace Hardware on Monday. The grant will help pay for work costing $190,024 at the store at 1880 Washington Road.
The work includes the removal and replacement of the front entryway, including a new double door, new permanent lighting, and the installation of stone on three sides of the building.
