The village of Kildeer, Illinois, faces a significant financial challenge following the closure of its top sales tax producer, Best Buy, earlier this year. In response to this loss and other economic factors, village officials are now turning to voters with a proposal to increase the local sales tax rate.
The Proposed Increase
On November 5, Kildeer residents will be asked to vote on a referendum to increase the local sales tax rate by 0.5%, bringing it to 8%. According to village officials, this would be the first such increase in approximately 12 years. The proposed rate would align Kildeer with neighboring communities like Deer Park and Long Grove, which already charge an 8% sales tax.
Michael Talbett, chief village officer, explained the reasoning behind the proposal: “Our stores won’t be at a disadvantage if people were even aware of it.” He also noted that Lake Zurich is planning to seek approval for a similar sales tax increase to match surrounding villages.
Economic Pressures Driving the Decision
The closure of Best Buy in March dealt a significant blow to Kildeer’s tax revenue. While Whole Foods Market has since become the village’s top sales tax producer, this source of income is also expected to decrease due to the upcoming repeal of Illinois’ 1% grocery tax, scheduled for January 1, 2026.
Talbett provided some context for the financial impact, stating that a 0.5% sales tax increase would generate approximately $400,000 for the village. He emphasized that the furniture store now occupying the former Best Buy space is unlikely to match the revenue previously generated by the electronics retailer.
Balancing the Budget
“We’re just trying to stay in place given the loss of sales tax that will occur,” Talbett explained. The proposed increase is seen as a way to replace lost revenue and maintain the village’s general fund without resorting to other measures, such as raising property taxes.
In a recent electronic newsletter, residents were informed that the increased sales tax would help avoid the need for a property tax hike while bringing Kildeer’s rate in line with those of Deer Park and Long Grove. Talbett also pointed out that the burden would be distributed equally, as sales tax applies to all shoppers, most of whom are not village residents.
Broader Economic Challenges
The decision to pursue a sales tax increase is not solely based on the Best Buy closure. Talbett highlighted additional factors contributing to the village’s financial situation:
- Limited land available for development
- A shift from retail to service-based businesses, impacting sales tax revenues
- The inability to rely on natural progression in sales tax income
Next Steps
As the November 5 referendum approaches, village officials are planning to ramp up their educational efforts. “Now we need to step up a bit to educate voters,” Talbett stated. Residents can expect to see more information about the proposed sales tax increase in future editions of the village newsletter.
