St. Charles to consider 2-cent-per-gallon gas tax

St. Charles has proposed implementing a local gasoline tax of 2 cents per gallon to help fund road maintenance and other capital projects.

The tax is expected to generate an estimated $425,000 annually if aldermen choose to support the new revenue source, Finance Director Chris Minick said. It would go into effect Nov. 1 to give the city and its fueling stations time to ensure the tax is administered effectively, he said.

The additional revenue could help fund the city's "fairly aggressive" roadway maintenance program staff members hope to undertake in the next few years, Minick said. The new tax would contribute about $212,000 to the city's budget for fiscal year 2018-19, which begins May 1.

"We'd like to spend a little more money maintaining and fixing and improving the roads here in the community," he said.

The proposed gas tax initially was lumped into 2018-19 budget discussions. Aldermen decided this month to remove it from the draft and consider it as a separate measure. Those discussions are expected to take place next month, Minick said.

"Obviously the impact to the taxpayers was mentioned as one of the potential drawbacks," he said. "But I think more importantly, the city council wanted a more comprehensive vetting of the gas tax."

Several suburban towns implement local gas taxes of 4 cents per gallon, including Naperville, Elgin, Aurora, Batavia, Mount Prospect and Rolling Meadows, according to city records. Schaumburg has a 3-cent-per-gallon tax.

St. Charles has a history of making prudent decisions to keep the city in a strong financial position, Minick told aldermen during initial budget discussions. But the city also has seen a roughly $450,000 dip in revenues because of changes at the state level, such as a reduction in the income taxes dolled out to the city and a new administrative fee, he said.

The new tax could offset that lost revenue and help the city become less reliant on state funds, Mayor Ray Rogina said.

"It's a tax, but at the end of the day, I don't think we're imposing that much on our citizenry given our fiscal responsibility," he said.

The city is not proposing any other new taxes or tax increases for 2018-19, Minick said. The proposed budget does include utility rate increases to keep up with growing costs, as has been done in years past, he said. A public hearing on the budget will be at 6:45 p.m. Monday.