Lake Bluff homeowners could see a local grocery tax return to their receipts by next year as the village grapples with a widening revenue gap from the state's elimination of the 1% grocery sales tax.

The Village of Lake Bluff Finance Committee meets Monday, Aug. 24, at 6 p.m. at Village Hall, 40 E. Center Ave., to review the combined fiscal picture: a $280,000 annual hit from the lost grocery tax and a 2.8% year-over-year decline in overall sales tax revenue.

The numbers

Finance Director Bettina O'Connell laid out the damage in an Aug. 20 memorandum to the Finance Committee. The village lost an estimated $70,000 in grocery-tax revenue in just the first three months of 2026, a pace that projects to $280,000 for the full year. That figure is up from an earlier estimate of $250,000, with inflation partly to blame.

Separately, June 2026 sales tax revenues came in at $370,895, down $10,835 (2.8%) from the same month a year earlier, according to O'Connell's report at the Aug. 10 Village Board meeting. In May, the picture was worse: sales tax dropped 14.7% year-over-year, though O'Connell noted at the June 22 Board meeting that fiscal year 2025 was unusually strong and that roughly half of May's decline was attributable to the missing grocery tax collections.

What changed

Illinois Public Act 103-0781 eliminated the statewide 1% grocery sales tax effective Jan. 1, 2026. Lake Bluff missed an April filing deadline that would have allowed a local replacement tax by July. The next available window is Oct. 1, 2026, which would put a local 1% grocery tax in effect Jan. 1, 2027.

The deadline is tight.

O'Connell's memo includes a draft ordinance for the committee to consider, along with a list of Illinois municipalities that have already adopted local grocery taxes.

Trustees split on urgency

The issue has divided the Finance Committee.

At the June 22 Board meeting, Trustee Brian Rener said the board should weigh reinstating the grocery tax if the downward trend continued, citing infrastructure and housing needs. Finance Committee Chair Susan Rider took a more cautious stance at the same meeting, saying she had not heard residents complain about the tax being gone and wanted clearer data separating grocery-tax losses from other factors.

Monday's session is the Finance Committee's first meeting since June, giving Rider, Rener and fellow committee member Trustee Taryn Fisher a chance to weigh the updated numbers together.

Investment update and what's next

The agenda also includes an investment portfolio update. The village works with investment advisor Sawyer Falduto and holds funds across IMET, Illinois Funds, Old National Bank, Wintrust, Lake Forest Bank & Trust and Schwab.

The revenue discussion comes against the backdrop of $23.6 million in FY 2027 expenditures, a budget in which property and sales taxes are the two largest revenue sources.

Residents can attend in person, watch the livestream at lakebluff.org/Channel19, or join online at lakebluff.org/VirtualMeeting. The dial-in number is (312) 626-6799, meeting ID 814 1963 9547. If the committee recommends moving forward, the full Village Board would need to approve the ordinance in time for the Oct. 1 filing deadline.