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
Riot Fest abandons Chicago park for SeatGeek Stadium
Spread the loveBy Bob Bong Last year, Lyrical Lemonade moved its Summer Smash hip-hop music festival from Chicago’s Douglass Park to Bridgeview’s SeatGeek Stadium. Thousands of fans poured into the stadium at 7100 S. Harlem Ave. over the course of three days and, by most accounts, enjoyed the experience. Summer Smash returned to SeatGeek this…
Comings & Goings: Orland Park Summerfest returns this weekend
Spread the loveBy Bob Bong Back for a second go round this weekend is the Orland Park Area Chamber of Commerce’s Summerfest. The event combines a carnival, live music, an array of dining options and a car show, at the 153rd Street Metra Station location in Orland Park and will run from Friday, June 14,…
Repair Cafe this Saturday at Township of Lyons HQ
Spread the loveBy Steve Metsch Repair cafes have become quite the thing for the Township of Lyons. So much so that another repair cafe will be offered from 10 a.m. to 1 p.m. this Saturday, June 15, at the township office, 6404 Joliet Road in Countryside. A repair café held in May was a smashing…
‘They didn’t have to kill my brother’ – sister of slain Bridgeview man
Spread the loveBy Steve Metsch Arturo Cantu should be celebrating two big events this weekend. He would have celebrated his 40th birthday on June 14. And, a sister said, he would have enjoyed Father’s Day on Sunday, spending time with family and his two young children. Instead, 10 family members and friends gathered in a…
‘You just learn to live with the pain’
Spread the loveStatus hearing in July for McCook murder By Steve Metsch The attorney representing a Chicago man charged with murdering a Blue Island man in McCook in February told a judge Wednesday there’s been “a significant and outstanding discovery in this matter.” Attorney Damon Cheronis made his comment before Cook County Circuit Court Judge…
Man shot in La Grange; suspect arrested in Stickney
Spread the loveBy Steve Metsch A man was shot Tuesday afternoon in La Grange, according to a news release received Wednesday from the police department. A suspect has been apprehended, the release said. The shooting victim remains in stable condition at a local hospital, the release said. La Grange Police, working with the Major Case…
Softball | Marist will play for state title for fourth straight season
Spread the loveBy Randy Whalen Correspondent Marist returned to the state title game for the fourth straight season with a 7-1 victory over Mundelein in the semifinals, held June 7 at Louisville Slugger Sports Complex in Peoria. The Mustangs (36-2) were making their first appearance at state since 1996. “We have a core group of returners,”…
McCook building inspector retires after 18 years
Spread the loveBy Steve Metsch After 18 years of inspecting buildings, be it a modest bi-level house or a sprawling multi-million-dollar warehouse, Terrence Hickey is retiring from the village of McCook. His retirement takes effect June 28, Mayor Terrance Carr said during the June 3 meeting of the village board. “I’m jealous,” Carr said. “(He’s…
New Summit Girl Scout troop off and running
Spread the loveBy Carol McGowan There’s a new Girl Scout Troop in Summit, and they have been busy. Troop 56615 is made up of girls from Summit School District 104 from first-grade to third-grade, and between 7-9 years old, making them Brownies in the scouting world. They have 10 girls so far, and Troop Leader…
Neighbors
Tabares backs West Lawn Branch Library
Spread the love Twenty-third Ward Ald. Silvana Tabares (left) recently toured the renovated West Lawn Branch Library, 4020 W. 63rd St.,, with new branch manager Mina Duarte. Details about the renovation’s may be found in the West Lawn column in the January 28 Greater Southwest News-Herald. –Supplied photo
Chuy backs Starbucks unionization
Spread the love U.S. Rep Jesús “Chuy” García (D-4th), white mask, recently stood with those who support unionization of Starbucks workers, outside a shop in the city. Workers are attempting to organize under the banner of Chicago and Midwest Joint Board, Workers United, an affiliate of the Service Employees International Union. –Supplied photo
‘Grizzled’ sophomores help Naz beat Marist
Spread the loveBy Jeff Vorva Staff Writer Nazareth’s “grizzled veterans” have won 19 of their first 20 games. The Roadrunners’ were victorious in a big East Suburban Catholic Conference showdown with Marist, with two sophomores doing most of the damage in a 53-42 win in LaGrange Park on Jan. 19. Nazareth improved to 19-1, 4-0.…
Postseason Sports Report: Area stars ready for state bowling and dancing
Spread the loveBy Jeff Vorva Staff Writer The first two IHSA state tournaments for winter sports will take place this weekend, and an army of area athletes will be competing in both. The boys bowling and competitive dance championships will be held Friday and Saturday, with the bowlers heading to St. Clair Bowl in O’Fallon…
Strus tops former coach in Stagg’s win over Sandburg
Spread the loveBy Jeff Vorva Staff writer Marty Strus has nothing but good things to say about his former high school coach, John Daniels. “He’s meant a ton to me,” Strus said of the coach he faced off against last week when his Stagg Chargers took on Sandburg. “He meant a lot to me as…
Palos Area Chamber dedicated to promoting area
Spread the loveBy Kelly White Dedicated to helping local area businesses strive is the Palos Area Chamber of Commerce. The chamber was formed in 1949 when a small group of merchants joined together for the purpose of advancing economic, industrial, professional, cultural, and civic welfare of the Palos Heights area. For 68 years, the Palos…
We need real solutions to crime
Spread the loveBy Peggy Zabicki Your correspondent in West Lawn 3633 W. 60th Place • (773) 504-9327 Crime and safety concerns are the number one topic of all the calls and texts I receive. It seems that many politicians offer no solutions except the usual lists of ways to keep safe. I think everyone knows about locking…
Icy spill yielded plenty of good will
Spread the loveBy Mary Stanek Your correspondent in Archer Heights and West Elsdon 3808 W. 57th Place • (773) 284-7394 Here is a giant shout out to our first responders in the community. On Jan. 9, when a sheet of ice descended on Chicago, I was walking the dog. Walking around Peck School was great.…
It’s a busy January in Gage Park
Spread the loveBy Joan Hadac Neighborhood correspondent at large Greetings, Gage Parkers! I’m pleased to be filling in this week for Karen Sala. It’s fun for me to report on Gage Park, the neighborhood where I lived for the first 26 years of my life. There’s always something happening in this big, exciting part of…
You might have mentioned that electric vehicles pay a higher annual registration fee and included this in your calculation.