Local fuel tax extended for three years

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Updated: May 9, 2012 10:15AM

Some Skokie gas station owners predicted serious losses in their business when Village Trustees in 2009 signed off on a new 3-cent per gallon local fuel tax.

But before approving a three-year extension of the tax Monday, trustees heard from village officials that the tax has had no negative impact on these businesses. Drivers did not fill up in other communities to avoid paying the tax in Skokie as some feared, according to figures from the Illinois Department of Revenue.

That information and the need for revenue to help pay for resurfacing streets throughout Skokie prompted trustees to vote unanimously to extend the tax into 2015.

“The Local Fuel Tax has successfully generated almost $1 million per year in its first two years and has funded approximately five miles of street resurfacing,” said Village Manager Al Rigoni.

According to Finance Director Bob Nowak, retail sales at all gas stations in the 12 months after the tax was initially approved increased over the previous year.

When trustees approved the tax in 2009, there were 22 gas stations in the village. Even though almost all nearby communities have a similar tax, some of the nearby ones including surrounding Lincolnwood’s had a tax of only 2 cents per gallon.

“It will be a disadvantage in my case,” said the owner of a gas station on the 3700 block of Touhy. “I’m right down the street from Lincolnwood. Three cents is high. I’d rather you compare yourself to Lincolnwood. They’re right next door. They’re 2 cents.”

Lincolnwood and Morton Grove continue to have taxes of 2 cents per gallon but Evanston’s tax is 4 cents per gallon and Chicago’s tax is 5 cents per gallon.

Other area municipalities have fuel taxes that vary within a few cents a gallon of each other from Wilmette’s 1-cent per gallon tax to 4-cent per gallon taxes in Park Ridge and Des Plaines.

Assistant Village Manager John Lockerby noted that the tax applies to all 21 Skokie gas stations, and residents and non-residents alike have to pay it.

The village’s greatest justification for the tax is the need to resurface streets regularly — especially after some difficult winters the last few years before the current mild one came along. The village maintains about 140 miles of local residential streets.

Recent construction projects, Lockerby said, have required about $450,000 to resurface one mile of street. Assuming every street is to be resurfaced after a maximum 35-year life span, he said, the village must resurface 4.5 miles every year.

Village officials also emphasized that residents have placed high priority on having their streets resurfaced and adequately maintained.

The local fuel tax is only part of the funding that goes toward street maintenance. Skokie allocates about $1.6 million every year from its motor fuel tax fund for street maintenance and repair. Revenue from the state on a per capita basis goes into the fund.

“The revenue is declining because the number of gallons (of gas) consumed in the state is declining,” Lockerby said.”This is good from a fossil fuel standpoint, however, there is less revenue to cities and counties.”

In fiscal year 2012, Lockerby said, the fund is projected to receive 2 percent less than the previous year.

Unlike three years ago, gas station owners did not turn out Monday to object to the tax.

Trustee Don Perille said he believes the tax is “closely related” to how the money is then used for street maintenance. Trustee Michael Lorge asked that the sunset provision continue with the extension, which means trustees in 2015 will have to decide whether to renew it again.

Mayor George Van Dusen said residents regularly ask when their street is in line for needed street resurfacing.

Village staff said that without the local fuel tax, the village could not resurface more than four miles of roadway every year.