Illinois Considers Raising Gas Tax, Vehicle Fees
Lawmakers are considering whether to ask Illinoisans to pay more for gasoline — with the money dedicated to fixing crumbling infrastructure.
A new proposal at the Statehouse would double the motor fuel tax — from the current 19 cents up to 38 cents a gallon. It would also up driver’s license and vehicle registrations fees, with the goal of raising $2 billion a year to pay for road, bridge, highway and rail improvements.
State Sen. Martin Sandoval, a Chicago Democrat, views this proposal as a starting point for negotiations of a sprawling infrastructure plan Gov. J.B. Pritzker has said he wants to see this spring. Sandoval said the proposal came from a labor union representing construction workers.
“Everyone has a huge laundry list of needs,” he said. “Very few people have any idea about how we should pay for it.”
Under the proposal, license fees would also double from $30 to $60, while registration fees for most vehicles would increase to $148 from $98. Electric vehicles would be charged $148 for a one-year registration, up from $35 for a two-year registration.
The additional funds would only cover “horizontal” projects - that is transportation related - and not buildings, such as schools, university or state facilities, that also need attention.
Opponents of the tax hike say with federal, state, and local governments all taxing gasoline, Illinoisans are paying enough.
“We pay one of the higher aggregate tax on motor fuel in the United States,” said Bill Fleischli, with the Illinois Petroleum Marketers Association.
Fleischli also pointed out that past General Assemblies have diverted money from the Road Fund to pay for the regular operations of state government. He said lawmakers should repay the Road Fund, and use the money to improve roads, bridges and railways. He also said the 6.25 percent sales tax that applies to fuel should goes towards road maintenance.
"Until that is resolved, I think we’re deceiving people to say the motor fuel tax goes for roads," he said.
Sandoval said lawmaker could look at the idea, but that they are looking for sustainable ways to pay for ongoing maintenance costs.
The last major capital plan, the $31 billion Illinois Jobs Now! Act in 2009, raised license and registration fees as well as alcohol and cigarette taxes.
The per gallon tax hasn’t been raised in the state since 1990. The new proposal would not only increase the motor fuel tax, it would also tie it to inflation.
At least six other states have adopted variable rate gas taxes, including neighboring Indiana, according to the Institute on Taxation and Economic Policy. The move is in response to two trends, according to the institute: rising construction costs and drivers paying less in gas tax because of more fuel efficient cars.
Craig Fink is the county engineer in Tazewell County and former head of the Illinois Association of County Engineers (IACE). He made the argument to lawmakers at a hearing in Decatur this week for a variable rate. He said costs for repairs have skyrocketed, while funding has stagnated.
“The (motor fuel tax) revenue stream could only afford to maintain four miles of county highway in 2014 for every 10 miles it maintained in 2000,” he said, referencing a study done by IACE.
“Revenues need to be indexed to adjust in relation to rising costs in order to break our historic cycle (of) providing basic maintenance and then neglecting our roads,” he argued.