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updated: 4/30/2013 9:17 AM

Carpentersville may hike motor fuel tax

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Carpentersville leaders will consider temporarily raising the motor fuel tax by 2 cents a gallon today, with the intention of retiring the rate hike in three years.

The village hopes to generate an additional $250,000 in annual revenue from the tax to adequately fund a budget line that would pay for vehicles and major equipment replacements.

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The village's existing motor fuel tax rate is 2 cents per gallon. If approved the hike would raise it to 4 cents per gallon.

Village President Ed Ritter said the hike is necessary since some of the equipment is starting to crumble.

"It's at the point where we keep trying to provide the best possible services and ... we need to do something," Ritter said Monday. "We can't keep postponing major equipment purchases."

The village created the budget line, called the capital replacement fund, about three years ago, according to Catherine Haley, the village's finance director.

Officials funded it by directing $500,000 from the general fund, $100,000 from the water and sewer fund and by increasing the telecom tax by 1.5 percent.

The board increased the telecom tax last year, and while all of the money it generated went into the fund, it wasn't enough to sustain it, Haley said. That's another reason the motor fuel tax hike is needed, she said.

The board would continue making the same contributions to the fund as it has done in the past, Ritter said.

The fiscal year ends Wednesday and there is currently $565,885 in the fund, Haley said.

If the board approves the rate increase, the village would spend $617,720 on vehicle and equipment replacements during the next fiscal year.

The vehicles scheduled for replacement are two squad cars, a fire engine, a backhoe, a dump truck and a van. Equipment includes one police vest and several miscellaneous items.

In the 2015 fiscal year, the village would spend $3.1 million on new equipment and vehicles. Among them are eight squad cars, seven dump trucks, four police vehicles and two ambulances.

For the 2016 fiscal year, the village would spend $637,621 for vehicle and equipment replacement. Included in that are three squad cars, two copiers and two vehicles for the community development department.

The increase would sunset after the 2016 fiscal year and revert to 2 cents per gallon.

If approved, the hike would go into effect July 1, Haley said.

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