Tax Increases Necessary To Support Local and State Road Programs

By JOHN C. MAGUIRE, ALDERMAN, Macomb, IL

Tax increases. Paying more money to the state. How can we afford it?

The real question is how can we afford to ignore it and when are we going to be straightforward and support the need to acquire funds necessary to maintain the infrastructure of our large and small cities, our townships and county roads.

As a municipal official I have witnessed the loss of revenue sharing dollars and the decline of revenues based on property taxes. At the same time, the cost of maintaining our roadways has increased. We need to build new surfaces, update existing roadways and the like.

Where do we get the money? For the 1985-86 fiscal year the City of Macomb received $350,000 in motor fuel tax funds (MFT). Under the proposal offered recently by Gov. James Thompson and Transportation Secretary Greg Baise, the local government share of MFT funds would be increased by approximately 35 percent at the end of the five year tax hike proposal.

The 5 cent, 1 1/2 cent, 1 cent, 1 cent, 1 cent proposal is a viable option to acquire the funds necessary to improve our surface roads. In the proposal local units of government would share in the extra revenues. Using the expected formula, the increase in funding for the city of Macomb would increase by as much as $120,000 by the end of the five year period.

As a non-home rule unit Macomb has limited avenues for the collection of additional tax dollars. Additionally, Macomb is the home of Western Illinois University, a state supported facility which does not pay property tax. Sales, income and motor fuel taxes are methods by which the local units of government can derive some income based on the total population.

Raising taxes is not a popular decision. Neither is neglecting our roadways, withdrawing our level of services and failing to maintain a transportation system at a level which can attract and retain economic growth.

The state is confronted with the need to preserve and enhance a road system valued at $60 billion. Illinois has the third largest road network in the country. Over the years the state has shared revenues with local units of government to provide Illinoisans with an unprecedented transportation network, which includes more than 100,000 miles of local roads and streets.

Local governments in Illinois received an assistance in state increase in 1983, however, these funds have been absorbed into little more than maintenance costs. As the expectations of the citizens increase and federal revenue sharing funds are withdrawn, local units are faced with the need to acquire more resources.

The state also faces the dilemma to finance its current five-year highway program and a seven year public transportation program which will complement Illinois' economic development strategy. This program would total $6.25 billion over the fiscal years 1988 to 1992.

In the state proposal the additional resources would be shared throughout the transportation system including $1.2 billion to be used for resurfacing major segments of the interstate highway system, $1 billion for widening and resurfacing 5,200 miles of the state system, $1.3 billion to undertake urban and suburban capacity improvements and other major projects to address traffic congestion, and $945 million to undertake major improvements in principal arterial corridors.

The additional corridor funds would supplement "Build Illinois" to improve service and access to Illinois Markets and speed completion of projects. Among the high priority corridors are routes in all areas of Illinois including Illinois 121 freeway from 1-55 at Lincoln and 1-74 at Morton, completion of new U.S. 50 from O'Fallon to Carlyle, four-lane upgrading of U.S. 67 from Macomb to Monmouth, maximizing progress on the Alton bypass, U.S. 20 improvements from Galena to Freeport and others.

Available to local highway programs would be $780 million in state funds to assist local units of government in matching Federal-aid Secondary funds ($15 million), a continued township bridge program ($75 million), a special program to assist needy governments ($30 million) and a local traffic signal and timing and interconnection program ($10 million). The financing proposal includes $612 million over five years of increased assistance to local units of government, making for an overall increase of about 40 percent in state aid to local governments.

Editor's Note:

The Board of Directors of the Illinois Municipal League will address this proposal at their March 25th meeting.

March 1987 / Illinois Municipal Review / Page 21

As part of the initiative $750 million will be conditionally available for the Regional Transportation Authority for capital improvements. Before enaction the RTA will be required to deliver a plan identifying improvements to be funded.

All of these projects are worthwhile and all of them are costly. Without new revenues the Department of Transportation's five-year program from fiscal year 1988 to 1992 will total about $3.5 billion. About $2.9 billion in new revenue will be needed over the five-year period to finance the proposed program and provide a corresponding increase for our local units of government.

The specifics of the Department of Transportation revenue proposal include increases in Motor Vehicle Registration Fees for cars and pickups by $17 effective 1988, yielding $560 million over the five-years; hiking Motor Vehicle Registration fees for all trucks by 30 percent effective in 1988, yielding an additional $223 million over five-years; increasing Motor Fuel Tax Funds by a total of 9.5 cents, yielding an additional $1.75 billion over five-years with 35 percent of the new revenues to be returned to local governments; and bonding authorization of $425 million more.

The Department of Transportation proposal to increase revenues and services provides local officials with a difficult choice. We can encourage our legislators to be supportive of this program or we can shrink to the constant cries of those who say no to all tax increases.

As local elected officials we have an obligation to not only listen to the opinions of the citizens we serve but to weigh the needs of those citizens as well.

Governor Thompson and Secretary Baise have said. "We in Illinois have a much deserved reputation of taking care of our infrastructure needs because we realize a solid economic base depends upon an aggressive road building program."

By taking action now we should support an aggressive transportation proposal that improves our road system and distributes additional funds to local units of government to maintain services. Let your legislators know that you support an increase in the state's transportation program and that you are willing to pay for it. •

Page 22 / Illinois Municipal Review / March 1987