Chicago Mayor Brandon Johnson called for a 1% tax on groceries on Tuesday out of concerns about the city's massive deficit.
Johnson's budget team met with the Committee on Finance: Subcommittee on Revenue to discuss the impending end to Illinois’ grocery tax, which will expire on January 1, 2026. The city currently has until October 1 to pass a new tax to replace the expired one to maintain revenue continuity.
During the meeting, Budget Director Annette Guzman argued in favor of the new tax, warning that the city could see an increase in its deficit and services cut without it.
Chicago Mayor Brandon Johnson argued that the grocery tax will replace a state tax set to expire next year. (REUTERS/Lucy Nicholson)
"Allowing that tax to lapse in 2026 would cost the corporate fund an estimated $80 million next year alone, further exacerbating our $1 billion-plus gap," Guzman said. "Nearly 200 other municipalities in Illinois — from Berwyn to Wheaton and beyond — have already voted to extend this grocery tax... If we fail to do the same, we will leave critical services on the chopping block."
She pointed to the city's police department as a potential victim of budget cuts if taxes like this were not passed.
"Roughly one-third of our corporate fund supports the police department and its related pension obligations. Without new revenue, staffing, training and community-based programs could face cuts," Guzman said.
The city has until Oct. 1 to introduce a new grocery tax. (Jamie Kelter Davis/Bloomberg via Getty Images)
In a press briefing, Johnson advocated for the 1% increase by pointing out that the new tax would only replace the one currently in effect without adding additional taxes.
"The City of Chicago will not enact its own grocery tax. The grocery tax already exists. There is a process in which the collection of the grocery tax is now being placed in the responsibility of municipalities," Johnson said on Tuesday. "We’re not creating a grocery tax. We’re just creating a process by which we can collect it."
The city council has not yet voted on a replacement tax. Alderman Andre Vasquez pointed out during the meeting that a local tax was not included in Johnson’s 2025 budget, which now puts the council in an awkward position.
Chicago Budget Director Annette Guzman warned the city's deficit could lead to cuts in services, including law enforcement. (Mitchell Layton/Getty Images)
"Had it been included in the budget, it might have gotten done in a way that’s going to feel a lot easier than this year," Vasquez said. "Hearing that 200 municipalities that already did it — it’s a bit frustrating. It was a missed opportunity."
Fox News Digital reached out to members of the committee for additional comment but did not immediately receive a response.
Though the city council can pass a new tax increase after the October deadline, the City Council Office of Financial Analysis reported in May that collections on any new ordinances would not go into effect until mid-2026.