Buffalo Grove fuel tax could help fund street program, village staff says
In an effort to address backlogged street repairs, Buffalo Grove is looking to the option of a local motor fuel tax. The 4-cent-per-gallon tax would essentially be a user fee and would be exclusively earmarked for transportation and roadwork.
The idea was presented by village staff to trustees at Monday's committee of the whole meeting. Deputy Village Manager Christopher Stilling said the existing motor fuel tax, which funds the village's street program, is insufficient to keep pace with the cost of roadwork, even with the state increasing the tax to 38 cents per gallon.
In 2016, the village issued nearly $6 million in bonds to finance street and infrastructure improvements, but virtually all that money was spent by the end of the year. From 2017-19, the village was only able to fund $5.2 million of $12 million in requested dollars out of the motor fuel tax.
In 2020, the village faces approximately $9 million to $11 million in roadway costs, including $6.8 million from previous years.
The new tax would generate $800,000 in new revenue from the village's seven gas stations, which could be bundled together with other funds to address roadwork costs. It could save residents roughly $46 per household per year, the amount the village would have to raise in property taxes.
"It doesn't solve all of our problems," Stilling said, "but it gets us closer to the solution."
About 30 other communities in the Chicago area, including Mount Prospect and Schaumburg, have a similar tax of 2 to 6 cents per gallon.
Trustees, who have been discussing a number of options for raising revenue, sounded a note of caution. Stilling said staff will have conversations with businesses about the impact and will come back to the board for more dialogue.