Illinois is in the midst of a budget mess where everyone agrees taxes need to go up, but few agree on what the best strategies are for raising the funds.
(TNS) -- Illinois needs to spend $43 billion over the next 10 years to fix roads and update damaged infrastructure, says the Metropolitan Planning Council. That’s a pretty big bill, but the Council argues it could be worse if the state ignores it — and Illinois has already been lax in raising funds for transportation.
Illinois hasn’t raised the gas tax since 1991, which means there’s been less and less money coming in for infrastructure. From Crain’s Chicago Business:
Since 1991, the average amount a person pays in Illinois gas tax has dropped 40 percent, even as construction costs have risen. The portion of roads in good shape has dropped from 90 percent a decade ago to 79 percent now and is on track to hit 62 percent by 2021. And only two-thirds of Chicago Transit Authority and Metra equipment and facilities are in good repair.
But Illinois is in the midst of a budget mess where everyone agrees taxes need to go up, and higher taxes are not a popular political move. Still, some ideas have been thrown around — the big two include raising the gas tax or adding a mileage tax. We’ll discuss what each involve and how that could help Illinois’ failing roads.
The MPC argues the state will need to raise $2.7 billion a year, half to spend and half to go towards bonds:
This is equivalent to a $0.30/gal increase in state motor fuel taxes and a 50 percent increase in vehicle registration fees. The tax and fees should be indexed to the consumer price index to keep pace with inflation. MPC recommends the state constitution be amended to create a transportation trust fund to protect this revenue. To acknowledge the effect of these increases on lower- and middle-income Illinoisans, the state earned income tax credit should double to 20 percent of the federal amount.
Because the state’s motor fuel tax has been unchanged for so long, Illinoisans are paying far less for road maintenance today when inflation is calculated:
Of course, not everyone is happy with that proposal. The Illinois Chamber of Commerce says Illinois needs to look into other options to fix roads. The Chamber’s recommendation includes an increased state income tax and a lower wholesale gas tax, while getting rid of some tax exemptions for goods like food and medicine.
Senate President John Cullerton has proposed a different way to get around a gas tax hike; a mileage tax. Illinoisans would pay 1.5 cents per mile in one of three payment options. From the Daily Herald:
Drivers could have a device that tracks the miles through geolocation technology, charging only for the miles driven on public highways and roads.
Alternatively, they could have an odometer tracker, which reports only number of miles driven, not where. The downside to this, notes Susan Martinovich of CH2M, an environmental and engineering consulting firms, is that drivers would be charged for miles driven out of state.
Finally, Illinoisans could opt out of installing any devices and pay a flat mileage tax of 1.5 cents per mile for 30,000 miles.
A mileage tax would also help the state raise revenue even as gas usage declines, thanks to better fuel efficiency and electric cars. The MPC’s plan also recommended Illinois stop raising funds tied to gas purchases eventually. It pushed for a mileage tax system by 2025.
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