Near 20-cent fuel tax increase begins July 1 in Ill.

Near 20-cent fuel tax increase begins July 1 in Ill.
Senate Bill 1939 increases the state’s motor fuel tax from 19 cents to 39 cents per gallon in Illinois. (Source: WAVE 3 News)

SPRINGFIELD, Ill. (KFVS) - Drivers filling up their gas tanks will pay more fuel taxes in Illinois beginning Monday, July 1.

Governor JB Pritzker approved four bills part of the Rebuild Illinois capitol plan.

In the capitol package, Senate Bill 1939 increases the state’s motor fuel tax from 19 cents to 38 cents per gallon.

This new policy has some Illinois drivers getting ready for summer travel reeling, and certain types of businesses wondering how it will affect their bottom line.

According to Gov. Pritzker’s office, the new fuel tax is sent to a “lockbox” which exclusively funds critical transportation projects statewide.

SB 1939 also doubles the special fuels tax from 2.5 cents to five cents.

The special fuels tax applies to diesel, liquefied natural gas and propane.

The new fuel tax increase will reportedly add an additional $400 million per year to local governments for local roads and bridges, $250 million to transit districts and $590 million to the state in Fiscal Year 2020.

The tax increase will be split three ways: 48 percent will go to the State Construction Account Fund for use on state roads and bridges, 32 percent will go to units of local government (motor fuel tax formula) and 20 percent will go to local transit districts.

SB 1939 also creates the Transportation Renewal Fund to receive the increased motor fuel taxes.

The following were also approved in the signing of SB 1939:

Title Fees:

  • Title registration fees increase from $95 to $150 for regular title fees and $95 to $250 for mobile homes.
  • Duplicate title fees decrease from $95 to $50.
  • Salvage certificate fees increase from $4 to $20.
  • Applying for a new title for junk vehicles will cost $10. This is a new fee created by the passing of SB 1939.
  • Title fees go into effect Monday, July 1, 2019 and expect to generate $146 million in new annual state revenue.

Vehicle registration fees:

  • The annual vehicle registration fee increases from $101 to $151 beginning with 2021 registrations and the electric vehicle registration fee from $34 every other year to match the registration fee for regular vehicles, plus $100 per year in lieu of motor fuel tax payment, effective January 1, 2020.
  • Truck registration fees increase by $50 for vehicles 8,000 pounds and under and $100 for vehicles 8,001 pounds and over.
  • Combined, these increases expect to result in $529 million in new annual state revenue.

Commercial distribution fee:

  • Repeals the commercial distribution fee on July 1, 2020.

Sales tax shift:

  • Beginning in Fiscal Year 2022, one-fifth of the net five percent state sales tax on motor fuel purchases will shift per year from deposit into the General Funds to the Road Fund, with the full amount deposited into the Road Fund by Fiscal Year 2026.
  • This will reportedly bring in $600 million annually at full implementation (shift of revenue only, not an increase).

Pedestrian and bicycle facilities:

  • Sets aside $50 million in funding for pedestrian and bicycle facilities and the conversion of abandoned railroad corridors to trails.

Transportation Funding Protection Act:

  • Creates this act, which requires local governments to use transportation revenues and fees for transportation purposes only.

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