With an Oct. 1 deadline looming, the Waterloo City Council opted by a 5-3 vote to maintain a 1 percent grocery tax the state has left in the hands of municipalities to keep or let expire. 

The state’s 1 percent grocery tax ends Jan. 1, but local governments have until Oct. 1 to retain it without asking residents for voter approval.

As previously reported, this 1 percent tax applies to grocery items intended to be consumed off-premises. Waterloo is home to such businesses as Walmart, Schnucks, Rural King and Dollar General.  

Although this grocery tax has been imposed statewide, the revenue collected goes exclusively to local governments. In ending this tax, Pritzker has placed pressure on local leaders to cut spending or continue taxing their residents. 

Coverage from taxpayer watchdog the Illinois Policy Institute detailed revenue generated by the grocery tax for Waterloo in 2023 was $408,820, citing the Illinois Department of Revenue in providing that figure.

Money received from this grocery tax is placed into the city’s general fund, which goes toward employee salaries, street projects and big ticket budget items.

In an ordinance committee meeting held prior to Monday’s regular council meeting, the pros and cons of the grocery tax were debated. 

“A lot of the revenue by this is paid by people that don’t live in Waterloo,” said Alderman Kyle Buettner, who chairs the ordinance committee. “They’re people that come from out of our city limits to shop in our town, and we benefit from that.”

Waterloo Mayor Stan Darter, who estimated 40 percent of the city’s grocery tax revenue comes from non-residents, said he has been a proponent of keeping this tax on the books from day one.

“This is not a new tax,” Darter said. “This is basically a shell game created by (Illinois Governor) JB Pritzker. The tax would be charged exactly the same. It goes to the State of Illinois and would come back to us like it always has.”

Buettner added the amount of money the city receives from property taxes each year “doesn’t fund the police department, doesn’t fund any of our big things.”

Buettner also pointed out that, due to the city operating a power plant, Waterloo is able to offer cheaper utility bills than Ameren or Monroe County Electric Cooperative. With the city’s new water plant now online, Waterloo avoided a rate increase from previous provider Illinois American Water, he said.

“Those are the really important things for the residents of the community,” he said. “Keeping utility bills that they see every month as low as we can. I think we’ve done a good job of that.”

Alderman Gary Most expressed his desire to let the grocery tax expire at the end of this year.

“We, as a municipality in Illinois, will be imposing this tax,” Most said. “It is a continuation, if you wanna look at it. However, the state just said ‘We’re not gonna collect this tax anymore.’”

Most continued that the removal of such a tax shouldn’t lead to cuts in police staffing or other positions being eliminated, but rather finding ways to save in other parts of the city budget.

“I think anything we can do to lighten a tax burden on a tax heavy community, on a tax heavy state, should be viewed and looked at,” Most said.

Alderman Jim Trantham asked whether more of the city’s video gambling revenue could be used in place of money received through the grocery tax.

Darter replied that gambling revenue is “transient” in that it is hard to predict.

“It would be great to count on it, but you cannot,” Darter said.

Alderman Joel Vogt said he was not sure of the actual amount the city receives from the grocery tax due to the Department of Revenue not being forthcoming with that information to the city over the years.

“The state has put us in a bad position,” he said.

Keeping the tax allows the city to find out how much money is generated, Vogt said, and the law allows the city to adjust the percent collected up or down quarterly once “hard numbers” are known.

“If you give this (tax) up, you are looking at putting 100 percent of that responsibility on the shoulder of the residents of Waterloo,” Darter said. 

In reiterating his stance against the tax, Most said “not everybody’s budgeted income goes up, and up and up.”

Alderman Jim Hopkins said every decision the council makes has a risk involved.

“I would hate to take that risk of suspending or deleting equipment, or canceling projects, or letting people go,” he said.

The committee’s vote to recommend passage of the grocery tax to the full council failed by a 3-2 count, with Most, Trantham and Alderman Jordon Riley voting against and both Buettner and Hopkins in favor.

Those same three aldermen voted against its passage when it was brought before the full council, with aldermen Kyle and Matt Buettner, Vogt and Alderman Tina Charron all in favor.

Vogt voted “yes” but “with the caveat we look at this again at the first quarter of next year around budget time to see what we’re actually missing if we don’t have it.”

Updating last week’s news of more late water samples submitted to the Illinois Environmental Protection Agency, Waterloo Public Works Director JR Landeck told the council the IEPA notified him this week that the city had six total late samples from the most recent testing batch. 

“Our mission continues to provide safe and quality drinking water for the citizens and users of our water system,” Landeck said. “We’re still working on identifying where the issues lie.”

Darter added he was set to meet with Certop on Tuesday morning to discuss the matter. 

The city hired Certop Inc. – a contract water operating company out of Clinton County – for operation, maintenance and management of its new $30 million plant located near Valmeyer.

The city’s new water treatment facility went online in late December, ending a contract with Illinois American Water that would have resulted in increased rates.