Buffalo Grove board approves local grocery tax

Buffalo Grove trustees voted this week to impose a 1% local tax on groceries when the state’s 1% tax expires on Jan. 1.

Village officials said that by not taking action, Buffalo Grove would lose approximately $1.4 million in annual revenue for its general operating fund.

“The $1.4 million is approximately 13.6% of our state sales tax and 2.9% of general fund operating revenue overall,” Finance Director Chris Black said at Monday’s village board meeting.

The village has four large grocery stores — Woodman's Food Market, Mariano’s, Jewel and Garden Fresh — with a fifth on the way, as well as an Aldi, two Walgreens, a CVS and several small independent grocers.

Neighboring communities including Wheeling and Palatine have enacted local grocery taxes as well.

“Given the fact that I think we're going to be getting less money down the road from the state of Illinois, we have to look out for our own good and our residents as well,” Trustee Lester Ottenheimer III said.

Village trustees expressed particular concern about the impact on a 2016 revenue-sharing agreement with Woodman's. Under the agreement, Buffalo Grove will share up to $7 million in sales tax revenue generated by the store, excluding fuel sales. Officials estimate grocery sales represent approximately 68% of Woodman's taxable sales.

Trustee David Weidenfeld noted that the agreement reimburses Woodman's for funding significant infrastructure improvements at the intersection of Deerfield Parkway and Milwaukee Avenue.

Trustee Joanne Johnson said the municipal grocery tax does not raise taxes but allows the village to fund essential village services such as public safety, snow removal and infrastructure maintenance.

“The state of Illinois is once again playing a shell game with municipal funding,” she said. “They’re eliminating a tax that was never theirs to give away and leaving local governments to clean up the mess.”