Chesney: Motor Fuel Tax A Double Taxation

Freeport, Illinois — If you have never heard of the state MFT, you are not alone. The Motor Fuel Tax, or MFT as it is known, is money collected from every gallon of gasoline sold in Illinois. The tax scheme was sold as a sharing mechanism that would allow the state to collect the funds and share them with local government. The MFT however is a flat tax, which means that regardless of inflation or the cost of gas, the tax is the same. Since inception, the MFT is worth about 30% less today, meaning local communities have seen an organic decline in funds derived from MFT, while the state has continued to funnel the bulk of the money into its Springfield coffers.

When the Illinois legislature overrode the Governor’s veto of the state budget earlier this year, they implemented a new income tax increase on both corporations and on individuals. They also cut the amount of money that local governments receive from the MFT. These funds are supposed to come back to local communities, and now the state is siphoning off even more of the money that was meant to support our local roads and infrastructure. Without these funds local governments will be forced to either do without needed maintenance or delay projects meant to enable local economic development.

The state’s use of these funds to balance their own budget should be seen as double taxation. It is a regular tax and then an additional administrative tax to be paid by you, the taxpayer. You pay your share, but then get less. In the new state budget, additional taxes were assessed to the communities solely for processing the paperwork to only send us back our own money. All too often, our State sweeps funds like the MFT to supplement their reoccurring budgetary shortfalls. The Motor Fuel Tax was intended to provide your local governments with the means to manage your local infrastructure. The problem is that many members in the general assembly see all taxes as their money, and a way to fund Chicago’s priorities as opposed to ours.

The vicious cycle occurs when economic development opportunities are limited or foreclosed upon because our state government cannot get its act together. Columnist Chuck Sweeny laid out some of these issues in his October 14th column regarding the MFT shrink and a specific economic development project in Stephenson County that would be reliant in part upon these funds.

With all the focus on the big-ticket projects like the multi-billion dollar giveaways that the state and Chicago use to court companies like Amazon, the efforts of Freeport, and communities like ours are lost. Our efforts are focused on growing and attracting the real economic engines of America, small businesses. For every global HQ relocation to Chicago, we send more of our money to fund these giveaways at the cost of our local sustainable economy.

Growth is critical to our local economic development. Expanding the tax base helps reduce the burden on existing businesses and residents. We cannot tax our way out of a hole, but we can grow our way to prosperity. We must start supporting regional economic development with the same vigor that we do for the population centers of Illinois. A rising tide will raise all ships, but right now, we’re draining the lake in order to fill the swamp.

Andrew Chesney is the current Alderman at Large in the city of Freeport, Illinois and candidate for State Representative of the 89th District. He can be reached on his Facebook page here.

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One thought on “Chesney: Motor Fuel Tax A Double Taxation

  • November 6, 2017 at 9:44 pm
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    If it is double taxation we should all be asking for a repeal. It appears Chesney stance is we need to get more of the tax back into the local coffers as it was setup to do. At the same time he points out the fallacy of paying the state gov’t to process a tax we pay to then have that tax sent back to us. It would be much more efficient and less wasteful if gov’t was not involved and this tax was not collected at all and all the localities did not have to pay it in in the first place. Which means they can spend it without state gov’t charging them to get it back. Right ?……this tax would/should in that scenario then be changed to a % fuel tax like the current Freeport 2% fuel tax in Freeport. Then that money would go direct to the city for roads. More efficient and also follows the cost of gas increases and decreases as it would be a percent and not flat. Right?……what about part B..http://www.revenue.state.il.us/Publications/Bulletins/2017/FY-2017-10.pdf. that is levied as a percent.

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