First month of Grocery Sales Tax shows higher-than-expected returns–Mayor Knebel says it was right decision to keep 1% tax in place

The City of Vandalia has now gotten figures for their first month of the 1% grocery tax they enacted back last summer. And, without approving that tax, it looks like the city would have lost far more revenue that was originally estimated.

Better than one year ago, the State of Illinois said they would be eliminating the 1% grocery sales tax. That money went directly to the municipalities—so it would be a loss of revenue for them. But, the state allowed communities to enact their own grocery tax to make up for the loss. In July of last year, the Vandalia City Council approved the 1% grocery sales tax to continue receiving that revenue. At the time, it was estimated the City of Vandalia would lose about $200,000 per year if they did not enact the tax. But, one month in it looks that number was under-estimated. The first month of the grocery tax brought in $40,509 for the City of Vandalia. Speaking on our podcast “Talking about Vandalia,” Mayor Doug Knebel says enacting the 1% tax was the right decision to help the city maintain their revenue base by just keeping taxes at the same level.

And, Knebel points out without enacting the tax they would have lost that revenue and it could have impacted services to the community.

You can check out this week’s podcast—and all of our past podcasts—on our website at www.vandaliaradio.com and under the Podcast tab.