THE FOLLOWING IS A NEWS-GAZETTE STORY BY JENNIFER BAILEY
DANVILLE — A grocery tax is being proposed by city officials to replace a 1 percent sales tax on groceries the state will no longer collect on municipalities’ behalf as of Jan. 1, 2026.
If the Danville City Council doesn’t approve the city’s proposed budget for fiscal year 2025 with a 1 percent local grocery tax included, officials will need to make $240,000 in budget cuts for that fiscal year and $750,000 to $1 million in cuts in years after, according to Mayor Rickey Williams Jr.
The council’s Public Services Committee, meeting at 6 p.m. Tuesday at City Hall, 17 W. Main St., will consider recommending the implementation of a Municipal Grocery Retailers’ Occupation Tax and a Municipal Grocery Service Occupation Tax for the city.
Because Danville is a home-rule city, it can collect the tax on its own.
Comptroller Alyssa Sweeten said the only difference to shoppers on the state tax is that the revenue wouldn’t go to the state first. It would go directly to the city.
“It’s the same tax that everybody’s already paying; it’s just we would collect it instead of the state,” Sweeten said.
The current state tax on groceries is 1 percent, meaning for every $100 spent, $1 is collected and then sent to the city, Williams said.
Sweeten said the current grocery tax comprises about 10 percent of sales-tax revenue the city collects from the state.
She said there would be no additional burden on the city to collect the tax.
Ward 7 Alderman Bob Iverson said he’s against the idea.
“It’s a unique chance for the city council to actually cut taxes for the public,” Iverson said.
He said the state comes out looking like a hero by cutting taxes but makes municipalities look bad for continuing to collect this one.
He also said that voters have told him grocery prices are one of the most important issues that they have.
He said he thinks the city should show that grocery prices are important as well, and while that may mean the city will lose money and additional budget cuts will be needed, it will also will see more motor-fuel tax funding with the process being changed.
The grocery tax is not a lot of money, but every bit helps in giving shoppers a break, Iverson said.
Ward 3 Alderwoman Sherry Pickering said if a family spends $250 a week on groceries, the $2.50 they would pay to the grocery tax is only the price of a bottle of soda, and she doesn’t think people will miss it, and residents will continue to benefit from the $60,000 a month the city receives from the tax, she said.
Ward 5 Alderman Mike Puhr said the city’s gas tax will be going up about 9 cents to 18 cents a gallon under the city’s proposed budget.
“That’s another blow we’re going to be looking at,” Puhr said.
The council plans to vote on the budget and tax levy at its Dec. 3 meeting.
In other action items Tuesday night, the committee is expected to approve a $2.08 million contract with “low responsive, responsible” bidder Homrich Wrecking Inc. of Carleton, Mich., for the demolition of Bresee Tower and the former Vermilion County Courthouse Annex.
Twelve bids ranged from $1.36 million to $4.9 million.
Aldermen also will consider using home-rule authority to raise the maximum age for police-officer applicants from the current 35, which is set by the state, to 40 to try to expand the pool of eligible applicants.
Under the proposal, anyone seeking to apply for the police department must be at least 21 nor more than 40 years old at the start of training.
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