Other states and regions are far ahead of the State of Illinois and metropolitan Chicago in raising revenues to support infrastructure projects with long-term benefits for livability, mobility, and the economy. About half of the states have raised transportation revenues since 2012, while Illinois has not. We need additional, ongoing support to rebuild and modernize the transportation system using a stable, adequate, and fair revenue structure. We also need the right policies in place to guide our investments in the transportation system.
Illinois has traditionally funded infrastructure through episodic capital bills. The last was in 2009. While these resources are welcome and necessary, their timing is unpredictable and their duration is brief. The most recent program, Illinois Jobs Now!, relied in part on speculative, inadequate new revenue sources. Furthermore, this boom-and-bust cycle of funding strains the ability of the state and its contractors to deliver results. Meanwhile, the state’s tax rates on motor fuel have been in effect since 1990 and now buy about half of what they once did due to inflation.
Principles for Transportation Funding
• Sustainable: New transportation revenues must provide sufficient and sustainable funding to improve, enhance, and expand the system. Diversifying by having more than one source of funds in addition to increasing traditional sources such as the motor fuel tax would improve the reliability of funding. New funding, as well as existing fares and tolls, should grow sustainably — such as by indexing rates to inflation — to keep pace with the costs of operating and improving the system, which inevitably increase over time.
• Multimodal: New revenue options should help the region achieve a well-integrated multimodal system. Revenues should be allocated flexibly to improve not only the region’s road network but also its transit, bicycle, and pedestrian networks. Supporting all modes also requires that all jurisdictions be permitted to fund transportation improvements that would benefit their residents and businesses, regardless of jurisdiction or ownership.
• Benefit-based: Costs should be paid primarily by those who use the transportation system the most or derive the most benefit. All revenue options ought to be considered and include replacing or restructuring traditional revenue sources to address the impacts of new technologies such as alternative fuel and autonomous vehicles on the system.
• Performance-based: Project selection criteria must be used to fund the projects of greatest impact. Such a performance-based approach can result in a geographically equitable distribution of funding while allowing all areas to access the funds they need for large, important projects.
• Considers ability to pay: Some revenue sources can have disproportionate impacts on low income residents. To promote equity, revenue enhancements should reduce the burden of increased costs on lower income individuals or offset such costs through other tax strategies.
Helpful Revenue Estimates
An increase in the current motor fuel tax of $0.15 – 0.20 would generate gross statewide revenues of approximately $900 million – $1.2 billion in the first year. This could grow annually if indexing is enacted.
An increase in motor vehicle registration fees of $25 from their current $98 for passenger cars and B-plate trucks would generate approximately $225 million.