To make the tax more palatable, some communities are designating the money for road and infrastructure improvements, said the report. And while officials defend the need for revenue, gas station owners say the tax puts them [image-nocss] and maybe the towns at a competitive disadvantage.
In Des Plaines, owners with convenience stores want the right to sell packaged liquor to make up for what they say they are losing.
"People will gas up in other nearby towns," Naperville Marathon owner Rick Jaracz told the newspaper. "They might also do some shopping there too. The idea is to keep the money in the community."
Jaracz said he is worried that his business will not stay afloat. He says that he tries to make a profit of 5 to 7 cents per gallon of gas, but that the tax may make that impossible.
"Either we are going to have to absorb the [tax] increase and take it out of our back pocket or pass it along to the customers," Jaracz said. "The problem is, I can't remain here and sell gas for nothing. It has to be profitable."
Nadja Lalvani, a spokesperson for Naperville, told the Tribune that the city would remain competitive with its neighbors, which have different taxes, such as a sales tax. Naperville is focusing on gasoline taxes rather than increasing property taxes and sales taxes, she said.
According to the paper, Bolingbrook's gasoline tax is 5 cents per gallon, while Wheaton charges 4 cents, Woodridge 2.5 cents and Downers Grove 2.5 cents.
Naperville needs to close a projected fiscal 2011 budget gap of $5.5 million, and the gasoline tax is estimated to bring in $700,000 a year for each cent of tax per gallon. Officials delayed a vote on the tax for later in March.
But Bill Fleischli, executive vice president of the Illinois Petroleum Marketers Association (IPMA), said municipalities need to be cautious about imposing such taxes. Residents already pay almost 39 cents per gallon in taxes plus a sales tax that fluctuates with the price per gallon and other sales taxes.
"There are many cons to raising gas taxes in a community," Fleischli told the paper. "It does force people to cross state lines or go to another municipality where taxes are cheaper. People will go to another gas station that's just a penny cheaper. Gas stations that are out of whack with their competition, even by just a penny, usually take a cut of about 10% of their volume the first day."
A 3-cent-per-gallon gasoline tax took effect March 1 in Oak Lawn, and Evergreen Park doubled its gasoline tax in December to 6 cents.
Oak Lawn officials said the gasoline tax will generate about $750,000 per year. Village trustees had rescinded a 3-cent fuel tax because it was paying for day-to-day operations, Village Manager Larry Deetjen told the paper. But after designating the money for road and water/sewer improvements, they reinstated the tax. "There's a major distinction," Deetjen said.
Evergreen Park should see an additional $500,000 in revenue because of the gasoline tax, which had not been changed since 1995, according to Deputy Village Clerk Kim Cericola. "We were dealing with budget issues like everyone else and that was an area the board felt could be increased," Cericola told the Tribune. The village uses the money to cover day-to-day expenses.
Tim Georgiopoulos, owner of the TA Mobil in Oak Lawn, told the paper that business is already tough. "It's understandable," he said of the increase. "But at the same time, it's a tough business as it is; we don't need any extra burdens." Georgiopoulos estimated that he makes a profit of about 5 to 6 cents per gallon unless there's a "gas war."
A 2-cent gasoline tax took effect in January in Glenview, where officials said they hope to raise $290,000 a year to help fix streets. Surrounding towns such as Morton Grove, Skokie and Wilmette also have a local motor fuel tax, ranging from 1 to 3 cents per gallon. Des Plaines officials in January doubled their gasoline tax to 4 cents, which will expire in December 2013, said Finance Director Dorothy Wisniewski.
"The reason we implemented the gas tax increase was to do more capital projects, such as reducing flooding in Des Plaines," she told the paper. Wisniewski said the increase will bring in $800,000 more a year. A City Council committee recently supported a proposal to allow gas stations with convenience stores to sell liquor to offset possible losses from the new tax. No date has been set for a council vote.
Ernie Phillips, owner of the Touhy & Wolf Shell Inc., said he will pay the taxan estimated $2,000 a monthout of his pocket instead of passing it along to his customers. He said he sells an average of about 100,000 gallons of gasoline per month.
"There is nothing I could do; I have to be competitive with other gas stations," Phillips told the paper. "I would lose my customers if I pass this tax along to them. Yes, I'll stay in business, but I won't be making as much."
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