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
Donate teddy bears to our local police
Spread the love. Peggy Zabicki Your correspondent in West Lawn 3633 W. 60th Place • (773) 504-9327 . Have you ever seen the 1955 movie The Night of the Hunter? The children in this movie show such bravery and acceptance in what life has thrown at them. They have to deal with unimaginable events and sadness. …
Boy Scouts collecting tattered flags for disposal
Spread the love. By Mary Stanek Your correspondent in Archer Heights and West Elsdon 3808 W. 57th Place • (773) 517-7796 . Goodbye April, hello May. Our American Flag, the symbol of our country, should always be treated with respect. But after bearing Chicago’s brutal winters and hot blazing summers along with being in the…
Oak Lawn trustee says village needs state grocery tax
Spread the loveBy Joe Boyle An Oak Lawn trustee said that Gov. J.B. Pritzker’s proposal to eliminate the state’s grocery tax will be costly for the village. Trustee William “Bud” Stalker (5th), accompanied by Mayor Terry Vorderer, recently returned from a fact-finding trip to Springfield where they learned more about the governor’s proposal to eliminate…
Palos Heights recognizes volunteers
Spread the loveBy Nuha Abdessalam Palos Heights handed out awards last week recognizing the services provided by volunteers through the years. The proclamations, which were read aloud during the city council meeting April 16, were a testament to the city’s volunteers and were handed out as part of Volunteer Recognition Week. Volunteers were cited for…
Boys Volleyball | Richards weathering struggles after run of success
Spread the loveBy Xavier Sanchez Correspondent After a tough weekend at the Smack Attack tournament, Richards got back into the win column with a two-set victory over Eisenhower in a South Suburban Red match. The Bulldogs made quick work of the Cardinals, winning 25-16, 25-15 on April 23 in Oak Lawn to snap a five-match…
SD218 puts on annual Arts Extravaganza
Spread the loveBy Kelly White The arts have become a major portion of the curriculum Community High School District 218. Showcasing those many talents, the Friends of CHSD 218’s Education Foundation proudly hosted its 15th annual Arts Extravaganza on April 5 at Eisenhower High School in Blue Island. “The Arts Extravaganza is a great event…
Gaming licenses to be tougher to get in Orland Park
Spread the loveBy Jeff Vorva It’s going to take longer to receive gaming licenses in Orland Park. The village board passed an ordinance April 15 that would allow table service businesses open at least 36 consecutive months to apply rather than the previous 18 months, and extended the probationary period to 18 months instead of…
Palos Park passes $16 million budget
Spread the loveBy Jeff Vorva The Palos Park Village Council approved the 2024-25 budget, which totals a little more than $16.3 million at the April 22 village council meeting. According to village documents, it represented an increase of a shade over $603,000 from last year. The village is expecting $13.4 million in revenue and $1.86…
Fire damages Al Bahaar Restaurant in Orland Park
Spread the loveFrom staff reports Orland Fire Protection District firefighters responded to a fire Monday evening at the Al Bahaar Restaurant, 39 Orland Square Dr. At first, restaurant owners suspected the fire alarm was triggered by a malfunction, but as firefighters inspected the restaurant to reset the fire alarm, they detected a burning smell. “What…
Neighbors
Chicago Bears recognize St. Rita senior with All-Star award
Spread the loveBy Jeff Vorva Correspondent Chances are good that few outside of St. Rita football circles know who David Lyle is. With good reason. Lyle missed his senior season for the Mustangs last fall after sustaining a serious knee injury. He even postponed having knee surgery so that he could take care of his…
Pols want 63rd St. armory for new police HQ
Spread the love. Porfirio, Guerrero-Cuellar push plan in Springfield . By Tim Hadac Any plans the Chicago Department of Aviation may have had for the vacant Army National Guard Midway Armory, 5400 W. 63rd St., may be grounded, at least for now. Several elected officials are eyeing the parcel as the headquarters of a new…
Her back against the wall, Stacy needs help
Spread the love. By Tim Hadac Editor Clear-Ridge Reporter & NewsHound (708)-496-0265 . Clearing and Garfield Ridge have earned a reputation as a place where people look out for each other—and that sometimes means caring for each other in times of need. Today, I want to talk about one such person, who sure could use…
It’s (pizza) party time at OLS
Spread the love. Third graders at Our Lady of the Snows School break into cheers as they learn they’ve won a pizza party for selling more raffle booklets than any other class. The recent Grand Raffle fundraiser brought in about $6,000. Parents looking for a grade school for their sons and daughters for 2024-25 are…
Dart wants free mental health care for first responders
Spread the love. From staff reports The Illinois Senate has passed legislation proposed by Cook County Sheriff Thomas J. Dart that eliminates out-of-pocket expenses for first responders seeking mental health treatment. “We ask first responders to be constantly exposed to traumatic and dangerous situations to protect us,” Dart said. “This legislation is a solid step…
Volunteers give Palos Heights a spring cleaning
Spread the loveBy Kelly White Palos Heights works hard to keep its city beautiful. Gathering residents together for a day of cleaning and fun was the Palos Heights Green Team with a Clean Up Day on April 13. “This event invited everyone in our community to do their part in combating pollution by having a…
Hunt man who tried to rob Chase Bank
Spread the love. FBI looking for tips from public . From staff reports FBI officials are appealing to the public for help in finding a man who attempted to rob a Southwest Side bank branch. The bandit tried to rob the Chase Bank branch at 5687 S. Archer (just west of Laramie) at about 11…
Casten lauds Biden for ‘clean energy’ move
Spread the love. From staff reports A move designed to spur the responsible development of clean energy on America’s public lands was recently lauded by U.S. Rep. Sean Casten (D-6th). The congressman, co-chairman of the House Sustainable Energy and Environment Coalition (SEEC) Clean Energy Deployment Task Force, joined by co-chairman Mike Levin (D-Calif.), released a…
E-Notary makes things easier, Giannoulias says
Spread the love. From staff reports Illinois residents will no longer have to notarize documents in person under a new Electronic-Notary system administered by Secretary of State Alexi Giannoulias’ office. Electronic Notarization, or “E-Notary,” will radically change the way people and use notary services, Giannoulias predicted. Without leaving the home or office, an individual or…
Oak Lawn honor Fire and Public Safety Contest winners
Spread the loveBy Joe Boyle The Oak Lawn Chamber of Commerce presented awards to the winners of the 2023 Fire and Public Safety Coloring Book Contest at the Oak Lawn Village Board meeting on April 9. Fire Bureau Chief David Wheeler and Police Chief Daniel Vittoro were on hand to present the plaques, along with Oak…
You might have mentioned that electric vehicles pay a higher annual registration fee and included this in your calculation.