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* Tribune…
Illinois could lose close to $560 million in gas tax revenue this year because of the coronavirus pandemic, which may delay some big state road and rail projects, according to a new report. […]
But the report from the Illinois Economic Policy Institute, a non-profit think tank, found that with road travel down by almost half, the state could lose $296 million to $559 million this year alone, depending on different scenarios. […]
The scenario for state funding could be even worse than the report predicts, and could extend into next year and beyond, said Frank Manzo IV, report co-author and the institute’s policy director.
“If we do not have more testing, if we don’t have more treatments and a clinically proven vaccine… there is a chance that our estimate is conservative,” Manzo said.
* Press release…
“As part of the Rebuild Illinois plan, annual revenues from the state’s Motor Fuel Tax (MFT) were expected to increase from $1.3 billion to nearly $2.6 billion,” said study-co-author and ILEPI transportation analyst Mary Tyler. “After applying the Chicago Metropolitan Agency for Planning’s (CMAP) estimates on pandemic related travel disruptions to three scenarios, with travel disruptions lasting from 6 to 10 months, we found that the state could under-perform expectations on MFT revenue by between $300 million and $560 million in 2020 alone.”
That upper-end estimate uses a 10-month disruption model, with the virus being most acute through August. The lower-end is based on a 6-month disruption, with the most acute period lasting through May.
The study is here.
posted by Rich Miller
Wednesday, May 6, 20 @ 9:09 am
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Is anybody looking at COVID-related savings? I’m wondering if asthma ER visits are dropping because of reduce air pollution — stuff like that. I’m not suggesting that these savings will offset the terrible drop in revenues — just wondering about the unexpected consequences…
Comment by Soccermom Wednesday, May 6, 20 @ 9:19 am
““If we do not have more testing, if we don’t have more treatments and a clinically proven vaccine…there is a chance that our estimate is conservative,” Manzo said. ”
Folks are staying home, and buying less gas for two reasons - The EO that limits business activity and a person own fear of contracting the virus. Lift the EO ( or move to phase 3,4,5) and a significant percentage of the population will get back on the roads immediately.
Comment by Donnie Elgin Wednesday, May 6, 20 @ 9:19 am
Have we reached the point yet where the taxes on fuel exceed the cost of the fuel itself?
Comment by City Zen Wednesday, May 6, 20 @ 9:19 am
City Zen-
Gas in Anna is around 1.61 per gallon, .38 cents of which is tax, so, no.
Comment by efudd Wednesday, May 6, 20 @ 9:26 am
Out of curiousity, how deeper would the loss of MFT revenue been had the gas tax increase not gone into effect last July 1?
Comment by Chatham Resident Wednesday, May 6, 20 @ 9:32 am
Oh no. Gas tax revenue is down. This type of study makes me wonder how independent any of these “think tanks” really are.
Comment by Squints Wednesday, May 6, 20 @ 9:38 am
efudd - I didn’t realize gas down there were exempt from federal motor fuel tax and state and local sales tax. Lucky you.
I have a county motor fuel tax on top of all that. Lucky me.
Comment by City Zen Wednesday, May 6, 20 @ 9:44 am
If gas followed the price of crude into negative territory, could the State get paid to accept the excess gas in exchange for storing it in local gas stations and then fund road maintenance? Could pigs then fly?
Comment by Froganon Wednesday, May 6, 20 @ 9:44 am
The good news is that this revenue source will need to approach zero over the next couple of decades if our civilization is going to survive CO2 pollution induced climate change.
This is a good dry run to come up with strategies to address other options for funding infrastructure projects aside from gasoline sales.
Hope y’all are ready for a future where gasoline is still sold, but there’s a tax to buy the carbon credit too.
Comment by Candy Dogood Wednesday, May 6, 20 @ 9:47 am
===Have we reached the point yet where the taxes on fuel exceed the cost of the fuel itself? ===
When the shut down first started there were a couple of communities where gas prices dropped low enough (into the $.70s) to achieve this, however the market soon hit a more reasonable equilibrium.
The cheapest I have personally paid is $1.19 but that was apparently a fluke.
Comment by Candy Dogood Wednesday, May 6, 20 @ 9:49 am
City Zen-
Your childish reply must make you think that those taxes still add up to more than half of the price per gallon.
I see you have fell in love this fallacy, I’ll leave the two of you alone.
Comment by efudd Wednesday, May 6, 20 @ 9:50 am
Froganon, the excess oil is not being refined. It is sitting in storage tanks, pipelines and tankers, so no real place to put it in local gas stations. The typical gas station holds 3-4 days worth, so even if business is down by half, they don’t have much room to store “exccess” even if it were in the form of gasoline.
Comment by Six Degrees of Separation Wednesday, May 6, 20 @ 9:53 am
===This is a good dry run to come up with strategies to address other options for funding infrastructure projects aside from gasoline sales.===
In the short term, I see no appetite for this. The transit agencies are in a world of hurt right now. We just passed a gas tax increase. At the federal level, the most hopeful idea I have seen is “Cash for Clunkers II” where people might be induced to buy more high mileage and EV vehicles.
Comment by Six Degrees of Separation Wednesday, May 6, 20 @ 10:02 am
efudd:
It’s best to ignore him. He always tries to be cute with his comments and responses.
Comment by Demoralized Wednesday, May 6, 20 @ 10:08 am
I worry the GA will try to pick the lock from the Lockbox Amendment and use that revenue to cut into deficit.
Comment by bogey golfer Wednesday, May 6, 20 @ 10:13 am
These numbers seem consistent with, if not lower than, American Association of State Transportation Officials (AASHTO) numbers that they are publishing of an average 30% reduction in MFT revenues over the next 18 months
https://aashtojournal.org/2020/04/24/state-dots-feeling-the-budgetary-impact-of-covid-19/
Comment by FormerILLobster Wednesday, May 6, 20 @ 10:45 am
IL will be hit harder b/c our neighbors with much lower gas taxes are opening up. The combination of taxes from the governor and price gouging because the AG is incompetent will significantly drop IL take.
Also, people leaving IL for their ranches in Florida has to hurt.
Comment by the Patriot Wednesday, May 6, 20 @ 11:03 am
Oh man. This is going to hurt. Half of that loss goes to the local agencies. The ripple effect throughout the State is going to hurt townships, Counties, and municipalities. The loss of revenue will defer maintenance, cause layoffs of highway staff. About the only way to backfill the revenue loss may be to raise property taxes for roads and bridges.
Comment by Huh? Wednesday, May 6, 20 @ 11:10 am
Pace spokesman today confirmed they still haven’t received one dime from the fuel tax that was earmarked for them. Even before the coronavirus the Governors office was holding back those tax dollars.
Comment by Hard D Wednesday, May 6, 20 @ 12:06 pm
Use existing revenue to cut a deficit? C’mon, this is Illinois. We all know darn well what will happen.
A very “necessary” and “temporary” “small” tax hike.
Comment by Some Guy In IL Wednesday, May 6, 20 @ 12:10 pm
Gas taxes:
.38 state and .18 federal +.01 clean up
Also there may be other taxes such local and state sales taxes throughout the state.
With a state sales tax, Chicago and Cook County sales tax, a regional transportation tax, a Cook County motor fuel tax and a Chicago motor fuel tax. Thus those in Chicago could have taxes of over .80 per gallon.
Note corrections if you have better data.
Comment by OpentoDiscussion Wednesday, May 6, 20 @ 12:18 pm
Oh man, this is going to hurt. About half of the MFT goes to the local agencies. The MFT losses will hit every single level of local government that receives MFT, townships, municipalities, and counties. The lost MFT will result in deferred maintenance and layoffs.
Comment by Huh? Wednesday, May 6, 20 @ 1:20 pm
Munis had already been receiving 46% more since September-ish. This will wipe that out and put us back to our 2018 levels.
Spring asphalt prices have been down, partially due to contractor’s needing a base amount of work for the year and to diesel prices being down, in addition to bitumen. We will actually be able to do slightly more work this summer than we budgeted.
Next year, however, we are anticipating only being able to do 75% of this year’s work.
Comment by Proud Sucker Wednesday, May 6, 20 @ 2:48 pm
Gas prices are nearly on the way back up to $2 in the Springpatch area.
Here in Chatham the BP and Shell stations are already at $1.89, as of earlier this afternoon when I ran an errand. Didn’t check what Circle K and the two Casey’s stations in town were running.
Meanwhile, Gas Buddy is reporting that Springfield stations are ranging anywhere from $1.68-$1.99.
https://www.gasbuddy.com/GasPriceMap?fuel=1&maxAge=0&method=&lat=39.83746702746465&lng=-89.61262545381786&z=11
I was almost going to respond on here that despite the pandemic, I would not be surprised if we’re at least back at $2/gallon gas by Memorial Day, but we could return to that threshhold sooner with the change to summer blends. If–and I mean if–shelter in place is lifted on May 30, I will not be surprised if we see a huge gas price hike in the Springfield area, and perhaps elsewhere, that weekend.
Comment by Chatham Resident Wednesday, May 6, 20 @ 3:43 pm
Frank Manzo and Mary Tyler at ILEPI are top notch
Comment by estubborn Wednesday, May 6, 20 @ 4:33 pm
–”Also, people leaving IL for their ranches in Florida has to hurt.”–
Ranches? In Florida? Does Jimmy Buffet know about this?
Comment by Flapdoodle Wednesday, May 6, 20 @ 5:58 pm