A statehouse proposal to eliminate Missouri’s grocery sales tax could lower prices on items like milk and bread, but city budget officials warn it would also create a significant shortfall in St. Louis’ budget. As local grocery taxes are phased out, the loss of revenue could quickly mount, creating tension between providing relief for shoppers and funding essential city services.
According to First Alert 4, the city’s fiscal note projects annualized revenue losses of about $5.2 million in 2027, $10.4 million in 2028, $15.6 million in 2029 and roughly $20.8 million in 2030 and beyond if the proposal becomes law. Lawmakers held a Senate hearing on the measure Tuesday. City officials told the outlet that those grocery-tax dollars now cover core services and that they have not yet mapped out how to plug the gap.
What the bill would do
House bill HB2079 would exempt retail food from the state sales tax starting August 28, 2026. It would also require local sales taxes on food to be ratcheted down in four equal annual steps beginning January 1, 2027, with a full local exemption kicking in on January 1, 2031. The measure narrows the definition of what counts as exempt food to items that qualify under SNAP and leaves most prepared foods out of the deal. That phased schedule is the backbone of the city’s long-range revenue loss estimates.
Why St. Louis would lose millions
The city’s fiscal note tracks the scheduled reductions and shows local grocery-tax receipts shrinking each year as the phaseout unfolds, opening a widening gap in the general fund. As outlined by KMOV/First Alert 4, officials estimate the first year of the phaseout would carve out roughly $5 million, growing to more than $15 million by the third year. The city says that money now helps cover everyday operations, so any loss would require either spending cuts or new revenue if the legislation moves ahead.
A broader pattern
Missouri is not debating this in a vacuum. Lawmakers across the Midwest in recent years have moved to end grocery sales taxes, and the storyline is familiar: shoppers get a bit of short-term breathing room at the register while local governments wrestle with long-term budget pressure. Reporting from Harvest Public Media via St. Louis Public Radio notes that other states have already eliminated state-level grocery taxes, leaving many cities and counties scrambling to backfill the lost income.
Supporters and critics
Supporters argue the policy is simple: cut the tax and families keep more cash for essentials. Missouri should join 33 other states in not taxing groceries Sen. Patty Lewis wrote in a December press release when she rolled out her legislation. Local leaders, including mayors and budget officials, counter that wiping out local grocery-tax revenue would inevitably mean tough choices on hiring, public safety and basic maintenance unless governments find a new way to bring in the same dollars.
What’s next
The bill still has a long way to go. It must pass both chambers of the Missouri Legislature and then land on the governor’s desk before anything changes at the checkout line. If lawmakers advance it on the current schedule, the state exemption would take effect this summer, with local grocery taxes stepping down through 2031. That would give cities several years to sketch out replacement revenue or rewrite their budgets as the grocery tax slowly disappears.
