Buffalo Grove hopes local gas tax will close gap on road repairs
Buffalo Grove is banking on the belief that the extra pennies paid by drivers filling up at local gas pumps will translate into hundreds of thousands of dollars annually to help the village maintain its streets.
Beginning next year, the village will impose a 2-cents-per-gallon fuel tax. Revenue generated by the tax, approved by trustees last week, will be earmarked for transportation and roadwork.
Deputy Village Manager Christopher Stilling said the new tax should generate about $400,000 per year. The money will supplement state motor fuel tax funds, estimated at $1.6 million in 2020, that are not keep pacing with roadwork needs, he said.
It will cost residents less to raise the $400,000 through the gas tax than it would if the village obtained the funds through property taxes, Stilling added.
According to the Chicago Metropolitan Agency for Planning, the average Buffalo Grove household drives 19,538 miles per year. Considering the average vehicle nationwide consumes one gallon of gas every 24.7 miles traveled, the average Buffalo Grove household likely purchases 791 gallons of gas each year.
If a household bought all its gas in Buffalo Grove, it would pay an additional $15.82 per year, compared to the $25 the average household would pay through a property tax increase, Stilling said.
"A municipal gas tax is a common solution to help fund roadwork costs in various communities," Stilling said. "In fact, many Buffalo Grove residents are likely paying this fee when they purchase gas in other municipalities during their time commuting or working in other communities."
He noted that Schaumburg and Hoffman Estates also charge a local motor fuel tax. The average is 3.7 cents per gallon.
Stilling said the gas tax fits into the village's long-term strategy of relying less upon debt to fund capital expenditures.
Trustee Eric Smith was the only board member who was unconvinced.
"This, to me, is the most business unfriendly thing we can do," he said. "We're targeting a certain occupation or business, and we're doing it in opposition to neighboring communities who have no gas tax whatsoever."