Report predicts billions in motor fuel tax revenue losses if state meets EV goals
By NIKA SCHOONOVER
Capitol News Illinois
nschoonover@capitolnewsillinois.com
SPRINGFIELD – Despite Illinois’ efforts to smoothly integrate electric vehicles into the state’s economy, a new report from the Illinois Economic Policy Institute is warning of a potential steep decline in transportation revenue as the process of electrification accelerates.
The primary issue is motor fuel taxes, which will see a significant drop as more electric vehicles make their way to the road and fewer people fill their cars with gas.
Since motor fuel taxes make up the backbone of state funding for road and bridge projects, ILEPI, which has strong ties to organized labor, warned in its report that new revenue sources will have to be identified to ensure the state’s 10-year capital improvements plan remains on track.
“There’s absolutely a benefit to having EVs but it will ultimately have a strong impact on transportation funding,” Mary Tyler, the author of the report, said in an interview. “It’s something that I don’t think is talked about enough.”
Motor fuel tax is the state’s leading source of transportation funding and makes up 52 percent of Illinois’ total transportation revenue and 82 percent of its contributions to the federal highway trust fund.
The report’s main policy recommendation is implementing a vehicle miles traveled, or VMT, fee which would replace the existing motor fuel tax with a fee determined by the number of miles a car travels on Illinois roads.
The idea has been floated in the past, including by Gov. JB Pritzker in an interview with The Arlington Heights Daily Herald during his initial gubernatorial campaign in 2018.
“In some states (such as Oregon), they have done tests recently for a VMT tax because we have more and more electric cars on the road, more and more hybrids, and because gas mileage is rising,” then-candidate Pritzker told the outlet. “It’s only fair if you’re on a road and traveling on that road that you should pay your fair share.”
In his four years as governor, however, Pritzker has not made a serious legislative push for a VMT.
It’s an issue that ILEPI says will become more pressing as the state moves toward its goal of putting 1 million electric vehicles on state roads by the end of the decade – a goal written into law with the passage of the Climate and Equitable Jobs Act in 2021.
Even before this promise was made, Illinois was seeing a yearly increase in electric vehicles. From 2017 to 2021, electric vehicle registrations have increased from 8,255 to 36,482. The most recent data from the Illinois Secretary of State’s office shows that, as of December 2022, there are 57,311 electric vehicle registrations.
“Looking at the growth we’re seeing, we’re seeing it grow at a faster rate than what we ever have before,” Tyler said.
According to Tyler’s estimate, Illinois would have to add 119,000 electric vehicles every year in order to meet their goal of one million by 2030. If that came to fruition, the state would lose $765 million in combined sales and motor fuel tax when accounting for added EV fees. Counting federal revenues, that figure would jump up to $1.1 billion.
Electric vehicles aside, Tyler said fuel-efficient vehicles pose an additional threat to the state’s transportation revenue. Roughly 10 percent of registered vehicles in Illinois are electric, while the rest of the 11 million are increasingly becoming more fuel-efficient.
“If you take a look at the picture of all the vehicles on the road, as newer vehicles come out that are more fuel-efficient, that means we’re just having overall, on average, a more fuel-efficient fleet,” Tyler said.
Tyler calculated that the total state and federal revenue loss over the next decade would be about $4.3 billion.
That loss would be especially threatening to the back half of Pritzker’s historic 10-year, $45 billion capital infrastructure plan known as Rebuild Illinois.
The roads-and-bridges portion of the 2019 program was made possible in large part by doubling the state’s motor fuel tax, which hadn’t seen an increase since 1990, then tying it to inflation in subsequent years.. The infrastructure plan also increased Illinois’ annual electric vehicle registration fee by $100 annually.
Tyler said while the fee hike helped replace some of the lost revenue, it won’t go far enough.
“As soon as the change can be made, the better,” Tyler said. “Even to this day, there are EVs on the road that are not paying as much as they would be on motor fuel tax. So there is an impact, it’s just right now the impact isn’t as big as what it will be in the future.”
Other policy areas to explore, Tyler suggests, include increasing existing registration fees even further, implementing a separate hybrid vehicle fee and creating an electric vehicle-specific kilowatt-per-hour fee.
Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to more than 400 newspapers statewide, as well as hundreds of radio and TV stations. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
1 Comment
Leave a Comment
Local News
Palos Heights tax preparer convicted of Covid-relief fraud
Spread the loveFrom staff reports A Palos Heights tax preparer who operates a business in Bridgeview has been convicted on federal charges for fraudulently assisting customers in obtaining loans under the Coronavirus Aid, Relief, and Economic Security Act. The jury in U.S. District Court in Chicago on June 10 convicted Hadi Isbaih, 42, on all…
Renovations begin on Shepard High School theater
Spread the loveBy Kelly White Shepard High School, which prides itself in the fine arts, will soon have a beautifully reconstructed theater right on its Palos Heights campus. The Community High School District 218 Board of Education recently unanimously approved funding for the renovation of the Fine Arts Center at the high school at 13049…
Young Spiderman fan wishes students a great summer
Spread the loveBy Nuha Abdessalam Spiderman-kid bids farewell and wishes a beautiful summer break to students of Glen Oak Elementary in Hickory Hills. Since the summer of 2023, when he discovered the movie “Spiderman: Into the Spider-Verse,” a story about multiple Spidermen from different dimensions, 6-year-old Ribhi Gaber has been more than just a fan…
Worth finalizes rules for open burning in village
Spread the loveBy Joe Boyle After several discussions over the past month, the Village of Worth has new guidelines for open burning by businesses and in residential areas. Mayor Mary Werner mentioned during the Worth Village Board meeting Tuesday night that a discrepancy in an ordinance regarding open burning had a 10 p.m. deadline. However,…
Orland Township event focuses on mental health
Spread the loveBy Kelly White Orland Township is taking the time to focus on mental health. Residents were invited out to join Orland Township Supervisor Paul O’Grady for an event called, Minds Matter 2024, on May 16 at Orland Township, located at 14807 S. Ravinia Avenue in Orland Park. “This was an excellent opportunity to…
Bridgeview shooting not related to Summer Smash
Spread the loveBy Bob Bong Bridgeview Police Chief Ricardo Mancha on Monday wanted to emphasize that a shooting in the village Saturday night had nothing to do with the Summer Smash music festival that took place over the weekend at SeatGeek Stadium. “It was an isolated incident,” he said. “Completely unrelated to the Summer Smash…
Summer jobs available for youths through Lyons Township
Spread the loveBy Steve Metsch The summer jobs program offered each year by the Township of Lyons is up and running. The program for high school and college students “is designed to give young individuals an opportunity for summer employment,” Trustee Donna McDonald said at the township board’s June 11 meeting. The jobs program started…
Pair busted for Summit phone store robberies
Spread the loveBy Bob Bong Two Chicago men have been charged with robbing two phone stores in Summit earlier this year. Jacari Franklin and Austin White are charged with robbing the T-Mobile store at 5640 S. Harlem Ave. on March 28 and the AT&T store at Archer and Harlem avenues on April 18, police said.…
Car enthusiasts crowd annual Father’s Day show in Lyons.
Spread the loveBy Steve Metsch Held under sunny and warm skies Sunday, the annual Father’s Day Car Show in Lyons was deemed a smashing success by participants and visitors. Not only were car lovers able to admire the four-wheeled beauties, some owners spent quality time with Dad or a spouse. Don Raschka, 80, of Central…
Neighbors
Area Sports Roundup: Six area girls bowling teams headed to sectionals
Spread the loveBy Jeff Vorva Staff writer Six area girls bowling teams are headed to sectionals. Reavis and Stagg won IHSA regional titles last Saturday, and four other teams have advanced to this weekend’s action. Reavis won its own regional at Palos Lanes in Palos Hills with a 5,378 in six games, well ahead of…
Marist cheerleaders takes 2nd in state
Spread the loveBy Jeff Vorva Staff writer After Marist’s cheerleaders watched a video of their state finals performance on Feb. 5, there were some long faces and tears as the girls filed out of the video room and into the cooling-off room. After a long meeting, there were more long faces. “I’ve had better days,”…
Oak Lawn-Hometown Middle School packs meals for needy during holidays
Spread the loveBy Kelly White Wishing everyone to have the best holiday season, Oak Lawn-Hometown Middle School students packed meals for those in need before they went on Christmas break. The school, 5345 W. 99th St., Oak Lawn, hosted its annual Feed6 Meal Packaging event on December 4, where students gathered together, while socially distanced, with…
McCord shows off Stagg student artworks
Spread the loveBy Kelly White Stagg High School art students proudly had their work showcased at a local gallery. McCord Gallery & Cultural Center, 9602 W. Creek Road, Palos Park, featured the art of Stagg’s most creative until January 28. “Having my work as part of an art show in an art gallery like McCord is significant to…
No injuries when Metra train hits school bus in Orland Park
Spread the loveBy Bob Bong No children were injured Friday afternoon when their school bus stalled on railroad tracks in Orland Park and the bus was hit by a Metra commuter train. The Orland Fire Protection District responded to an emergency call Friday when a school bus from American School Bus Co. carrying students from…
Charge West Lawn man in 47th St. slaying
Spread the loveBy Tim Hadac An 18-year West Lawn man has been charged with murder in connection with the June 11 slaying of a 20-year-old woman in the 4700 block of South Rockwell. Dilan E. Ugalde, of the 3600 block of West 62nd Place, was apprehended by members of the Chicago Police Department and the Great Lakes Regional…
Charge 2 in Ford City carjacking
Spread the loveBy Tim Hadac A 19-year-old man and a 15-year-old boy have been charged with aggravated vehicular hijacking in connection with a crime that occurred in a Ford City parking lot at about 8:45 a.m. Thursday, Jan. 27. Travell Barnes, 19, of the 6800 block of South Hermitage, and the boy allegedly took a…
Police reports
Spread the loveMan shot to death in Chicago Lawn A 23-year-old man was shot in the back of the head and killed in a crime that occurred in the 6400 block of South St. Louis at about 1 a.m. Saturday, Jan. 30. Officers responding to a “person down” call discovered the victim lying on the…
Building a bridge at Daley College
Spread the love‘After 22’ program to help adults with disabilities By Tim Hadac For Chicagoans with developmental disabilities, their 22nd birthday can feel like falling off a cliff. That’s when they become ineligible for the special education transition services they’ve received all their lives. That ineligibility can last for up to seven years, until they…
You might have mentioned that electric vehicles pay a higher annual registration fee and included this in your calculation.