As part of Governor. Pritzker’s proposed budget, he lobbied for the elimination of the “grocery. tax, ” which the Governor argues is a regressive tax which disproportionately. affects members of the community with the lowest income. The grocery. ...
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Municipal Minute

General Assembly Sends Major Changes to Sales Tax Laws to the Governor

As part of Governor Pritzker’s proposed budget, he lobbied for the elimination of the “grocery tax,” which the Governor argues is a regressive tax which disproportionately affects members of the community with the lowest income. The grocery tax is a part of the State’s sales tax that applies to “food purchased for consumption off the premises where it is sold,” or groceries. By comparison, a “food and beverage tax” applies to food purchased for immediate consumption on the premises from where it is purchased – like from a restaurant.  Because the grocery tax comprises a part of the tax revenue the State shares with cities and villages, the elimination of the grocery tax would result in a reduction of local revenues.

House Bill 3144 was adopted by the General Assembly on June 3, 2024, and would eliminate the grocery tax as of January 1, 2026. HB 3144 would also create the Municipal Grocery Occupation Tax Law that permits all Illinois municipalities to levy a local grocery tax of up to 1% beginning after January 1, 2026. The Municipal Grocery Occupation Tax would be administered, collected, and distributed by the State, as with other local sales taxes. October 1, 2025 is the proposed deadline for municipalities to adopt and file a tax ordinance with the Department of Revenue if they want to begin collecting the local grocery tax on January 1, 2026.

While the local grocery tax is designed to achieve revenue neutrality, House Bill 3144 makes an even more important change for non-home rule cities and villages. Currently, Section 8-11.1-1 of the Illinois Municipal Code requires non-home rule municipalities to obtain referendum approval as a condition of levying a local sales tax. Upon the enactment of HB 3144 into law, non-home rule municipalities will be able to levy a local sales tax without voter approval. The non-home rule sales tax can be levied in 0.25% increments and remains capped at 1%. The local sales tax can be commenced either January 1 or July 1 each year, provided the ordinance enacting the tax is filed with the State by October 1 or April 1, respectively. 

Keep an eye on the status of HB 3144 to see whether the Governor approves this legislation.

Post Authored by Adam Simon, Ancel Glink

Time is Money: U.S. Department of Labor Raises the Bar on Overtime Exemptions

The U.S. Department of Labor (Department) has issued a final rule that changes the salary threshold necessary for white-collar employees to be classified as exempt from overtime requirements under the Fair Labor Standards Act (FLSA). For a white-collar employee to be considered exempt under the FLSA, the following three criteria must be met:

   (1) The employee must be paid a fixed salary;

   (2) The salary must meet a minimum specified amount; and

   (3) The employee must primarily be engaged in executive, administrative, or professional duties.

The overtime rule raises the salary-threshold levels in two phases. Beginning July 1, 2024, the threshold initially increases from $684 per week to $844 per week. The second phase begins January 1, 2025, at which time the threshold increases to $1,128 per week (equivalent to $58,656 per year).

But the increases don’t stop there. In drafting the rule, the Department recognized the need to update earnings thresholds regularly. As a result, the threshold will automatically increase every three years beginning July 1, 2027. The automatic increases are based upon wage data at the time of the update.

While lawsuits challenging the Department’s authority to increase the overtime threshold have been filed, it would be prudent for employers to examine the salaries of existing exempt employees and remain prepared to affect salary increases should those challenges fail. 

Post Authored by Kevin Sterk, Ancel Glink

Court Upholds Injunction Against Water Shut Off to Mobile Home Park

In 2023, a municipality sent notice to the owner of a mobile home park and the residents in the park that it would be shutting off water to the park for nonpayment of water services. At that time, the mobile home park had a delinquent water account with the city for $858,447. The mobile home park was served by a single water main, and the owner of the park was responsible for payment of water services, not the individual residents of the park, and a shutoff of water would impact all residents in the mobile home park. One of the residents of the mobile home park filed a motion for a temporary injunction to stop disconnection, which was granted by the trial court. 

The city appealed the injunction to the Illinois Appellate Court, which upheld the trial court's order. Hammer v. City of Blue Island. The Appellate Court held that the status quo in this case was the continued provision of water service to the residents in the mobile home park, and that the balance of the equities in this case favored the residents because of the substantial harm if the water were shutoff while the case moved forward because that would render the residences uninhabitable. The Court also noted that the City's delay in taking action on the unpaid bill for two years, without notice to the tenants, exacerbated its own injury and harmed innocent tenants who were not aware that the park's water bill was delinquent. Finally, the Court acknowledged that the injunction was just preliminary relief, and that the city would still have the opportunity to defend the case. 

While this case only involved preliminary relief and the case will now move forward for the city to present its defenses against the lawsuit, this court ruling may provide some guidance to municipalities in similar situations to consider seeking legal remedies sooner rather than letting a delinquency continue for several years and to notify both the owner and tenants of water bill delinquencies.

Court Rules in Favor of Sheriff's Office in FOIA Lawsuit

In response to several FOIA requests asking for transcripts of conversations between Sheriff’s Office personnel and police dispatchers, a Sheriff’s Office released responsive records subject to applicable redactions. The requestor then sued, seeking a court order to compel the release of  records allegedly withheld from disclosure and to explain the FOIA exemptions used by the Sheriff’s Office to withhold or redact certain records. The lawsuit also asked the court to impose civil penalties against the Sheriff’s Office for allegedly willfully and intentionally failing to comply with the FOIA requests. 

After the lawsuit was filed, the Sheriff’s Office released additional records responsive to the requests, and explained the FOIA exemptions used to redact information. The trial court dismissed the lawsuit as moot since records had since been released and denied the request for civil penalties, finding that the Sheriff’s Office did not willfully or intentionally fail to comply with FOIA.

On appeal, the Illinois Appellate Court also ruled in favor of the Sheriff's Office. Harsy v. Perry County Sheriff’s Office. First, the Appellate Court agreed that the lawsuit was moot since the Sheriff’s Office had disclosed responsive records and properly cited exemptions to redact or withhold records. The Appellate Court also rejected the requester's "bad faith" argument since the Sheriff’s Office promptly issued refunds to the requestor for all claimed overcharges after the lawsuit was filed and failed to show the Sheriff's Office willfully or intentionally failed to comply with FOIA.

The Court also rejected the requestor’s argument that the trial court should have ordered the Sheriff’s Office to provide an index of redacted or withheld records, finding that because the requestor failed to request an index before the trial court’s in camera inspection, the necessity for an index after the circuit court’s in camera review was moot.

Post Authored by Eugene Bolotnikov, Ancel Glink


Quorum Forum Podcast Ep. 84: Legislative Update

Ancel Glink's Quorum Forum Podcast just released Episode 84: Legislative Update. The General Assembly recently concluded its spring session and Ancel Glink attorneys provide updates on legislation local government should know, including the grocery tax, small wireless facilities, and more!