Union-tied research group pushes for mileage tax to shore up road-building funds
Despite Illinois’ efforts to smoothly integrate electric vehicles into the state’s economy, a new report from the Illinois Economic Policy Institute is warning of a potential steep decline in transportation revenue as the process of electrification accelerates.
The primary issue is motor fuel taxes, which will see a significant drop as more electric vehicles make their way to the road and fewer people fill their cars with gas.
Since motor fuel taxes make up the backbone of state funding for road and bridge projects, ILEPI, which has strong ties to organized labor, warned in its report that new revenue sources will have to be identified to ensure the state’s 10-year capital improvements plan remains on track.
“There’s absolutely a benefit to having EVs but it will ultimately have a strong impact on transportation funding,” Mary Tyler, the author of the report, said in an interview. “It’s something that I don’t think is talked about enough.”
Motor fuel tax is the state’s leading source of transportation funding and makes up 52 percent of Illinois’ total transportation revenue and 82 percent of its contributions to the federal highway trust fund.
The report’s main policy recommendation is implementing a vehicle miles traveled, or VMT, fee which would replace the existing motor fuel tax with a fee determined by the number of miles a car travels on Illinois roads.
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