Urbana will 'absorb' loss of grocery tax, mayor says

May 23—URBANA — While Champaign is looking at an increase to its home-rule sales-tax rate to make up revenue losses from Gov. J.B. Pritzker's proposal to cut the state's 1 percent grocery tax, its neighbor city is planning to hold off on major changes as it plans for the next fiscal year.

"There are no proposed revenue increases or cuts in services specifically tied to the loss of the grocery tax in this budget," said Mayor Diane Marlin. "We are absorbing the loss this year and will identify options for consideration in the future."

According to the Illinois Municipal League, local officials estimate that eliminating the tax would result in an annual loss of $1 million for Urbana and $2.7 million for Champaign. The league estimates an approximately $325 million loss statewide.

"It was unfortunate that the decision to eliminate this source of revenue for cities was done with such short notice, long after we had completed our financial forecast and budget development was well underway," Marlin said. "An alternative approach could have been to phase it out, so that local governments had time to adjust."

According to Marlin, Urbana's proposed budget will be released this week as part of the packet for the next city council meeting and will be posted on the city's website.

Starting May 28, there will be a series of presentations and council discussions on the budget, she said. A public hearing is set for June 17, with final approval slated for June 24.