Where Does Your Gas Tax Go?

The only revenue source for road and bridge improvements is the Motor Fuel Tax (MFT), commonly referred to as the gas tax.

The federal gas tax hasn’t been raised since 1993.  Motor Fuel Tax (MFT) revenue and fees are calculated based on gallons sold, which means as the price of gas goes up and down the MFT remains constant. Regardless of whether or not you are paying $20.00 per gallon or $4.00 per gallon, the Road Fund is receiving the same amount of funding from the MFT. Combined state and federal gas taxes equals approximately 37.4 cents per gallon. This includes state (19 cents) and federal (18.4 cents), as well as associated fees. In addition to motor fuel taxes, residents pay a combination of local and state sales tax when they purchase a gallon of gas. Sales taxes are based on the purchase price so as gas prices increase, sales tax revenues also increase. Chicago residents pay sales taxes that go to the city, the county, the Regional Transportation Authority (RTA) and the State at a combined sales tax rate of 10.25 percent. The Department of Transportation's Conditions and Performance report estimates all levels of government would need to spend $105 billion per year to maintain and improve the condition of roads and bridges. New or increased revenue sources are vital to fund our nation’s and state’s infrastructure needs.

Tax Diversions

For every dollar the State of Illinois sends to the federal government in gas taxes, we receive approximately 98 cents back. 

The 19-cent gas tax in Illinois was intended to be directed solely to the Road Fund and State Construction Fund and used exclusively for infrastructure improvements. However, According to the Illinois Economic Policy Institute, $6.8 billion in transportation funds was diverted by Illinois' legislature between FY02 to FY15 in order to plug budget deficits in non-transportation related areas. In 2016, nearly 80 percent of Illinois' voters passed a Constitutional Amendment to safeguard the Road Fund from these diversions into the General Revenue Fund. However, Illinois legislators passed a state budget in July 2017 that diverted $300 million from the Road Fund to pay for transit. Previously, the costs of maintaining and expanding came out of the General Revenue Fund. This redirection of funds has been a perpetual diversion, occurring on an annual basis -- something our crumbling transportation network cannot afford to continue. Although transit rail is a vital part of Illinois' transportation network, the gas tax is intended to be a user tax -- where revenues collected are put back into the same system to pay for repairs to the road network.

Tolls & User Fees

It is important to note that the Illinois Tollway system is funded entirely from toll revenues collected on their roadways. Federal and state funding DOES NOT go toward funding of any Tollway projects. Those who use the system pay the toll money that goes right back into that system to help maintain roads as well as invest in new lanes to ease traffic congestion.  

How to Get Involved

Your voice counts and together we can make a difference! Take action to educate and bring awareness to the need for long-term transportation funding. Step outside of your comfort zone to effect real change in the way our government responds to the needs of commuters and the motoring public. Whether you’re a member of industry or a concerned citizen – your time, thoughts, and expertise can open doors through outreach and help change the laws and policies that affect your community and your ability to get you to and from where you need to go. Get involved by contacting your legislator today. 

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