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Funding & Finance

Coalition Urges Higher State Gas Tax to Fund Transportation

gas station
Under TFIC's proposal, the price of every gallon sold on the South Side, and throughout Illinois, would include about 8.5¢ in transit taxes. Photo: Eric Allix Rogers via Flickr

On July 1, 2014, Illinois' pool of transportation money will dry up. That's the day that the state's last five-year capital program—the law that funds maintenance and construction of roads, highways, and public transit across the state—expires. Without a replacement, roughly a billion dollars of annual support to the state's transportation infrastructure will disappear.

The Transportation For Illinois Coalition, or TFIC, wants to make sure that doesn't happen. The group, a statewide coalition of business, labor, and civic organizations, recently proposed a new capital program that would nearly double total transportation funding to $1.8 billion per year, and for the first time guarantee that 20% of all funds go to support mass transit.

TFIC's proposal (PDF) is just the latest plan to dramatically reshape transportation governance in Illinois. At the end of March, Governor Pat Quinn's transit task force released its recommendations to consolidate Chicago-area transit leadership in a single agency. Just a few days later, the Center for Neighborhood Technology and the Active Transportation Alliance launched the Transit Future campaign, which seeks a new funding stream within Cook County that would be entirely dedicated to mass transit. Unlike TFIC, however, Transit Future has not yet identified an amount or specific source of funding.

Each group agrees, however, that ambitious new funding is urgent, given the dire state of Illinois' transportation infrastructure. Chicagoland's mass transit system needs $20 billion just to return it to a state of good repair; statewide, 15% of roads are in unsatisfactory condition, and 35 percent could be unsatisfactory by 2018 without a new investment program.

“The bottom line is, you have to invest in your future,” said Doug Whitley, co-chair of TFIC and the President of the Illinois Chamber of Commerce. “Being able to make sure you can get workers to and from your locations, get your goods and services moved, is invaluable.”

TFIC's plan would raise over $800 million in new revenue, mostly through a four-cent-per-gallon increase in the gas tax but also through higher taxes on diesel, higher auto registration fees, and sales taxes on auto services. It would also earmark existing state taxes and user fees for transportation, principally the five percent state sales tax on motor fuel, thus diverting nearly one billion dollars of revenue from the general fund. (Illinois currently levies a motor fuel tax of 19 cents per gallon, which goes to transportation, as well as a sales tax of 5%, which goes to the general fund.)

That last piece has some people concerned, since it would mean taking money from other basic services paid for out of the general fund. The Chicago Metropolitan Agency for Planning (CMAP) released a statement saying the proposal would “severely affect the State's ability to fund various programs such as education, environmental protection, or healthcare and human services.”

CMAP also declared that it would like to see the motor fuel tax linked to inflation, so that it grows automatically and doesn't have to be raised by the legislature, which hasn't voted to do so since 1990. (The federal gas tax has also run into the same problems, as lower gas consumption and inflation drain its revenues.) For its part, TFIC counters that because the percentage-based sales tax revenue on gasoline rises with gas prices, it is a better candidate for reliable transportation funding.

Either way, Whitley says that the proposal has already accomplished part of its goal: making transportation funding part of the conversation, and raising the prospect that Illinois will join six other states that have recently raised their gas taxes.

“Without a proposal bringing attention to the issue, transportation needs will be off the table,” he said, noting that Governor Quinn barely mentioned transportation in his recent budget message. “We've spent enough time educating legislators that they understand the need for new revenues.”

But, he says, “as is always the case, legislators are willing to cut the ribbons, but not as willing to vote for the fee increases needed to fund the programs.”

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