From the Illinois Commission on Government Forecasting & Accountability comes this information about how Illinois’ tax on gasoline, plus its tax on the Motor Fuel Tax ends up subsidizing train and bus riders:
Taxes on Motor Fuel
Historically, the State’s 5.0 percent share of sales tax on motor fuel was treated in the same manner as sales tax on other general merchandise, and most of the proceeds were deposited into one of the General Funds.
This approach changed when the General Assembly enacted the Rebuild Illinois capital plan in 2019 (Public Act 101-0032).
As part of that legislation, the State began a multiyear process to shift sales tax revenue derived from motor fuel purchases to the Road Fund in order to support additional transportation investments.
Under this schedule, beginning in FY 2022, a twenty percent portion of the State’s 5.0 percent share of motor-fuel-related sales tax revenue was to be redirected to the Road Fund each year.
This process was designed to phase in the distribution change over five years so that, by FY 2026, one hundred percent of the State share would be deposited into the Road Fund.
However, during the FY 2026 budget process, the final year of this transition was delayed until FY 2027.
Senate Bill 2111 would modify this schedule again. Instead of sending one hundred percent of the State share of sales tax on motor fuel to the Road Fund, the bill would direct those revenues to the Public Transportation Fund and the Downstate Public Transportation Fund.
These funds support mass transit systems throughout Illinois.
During the FY 2026 budget process, it was estimated that the State’s 5.0 percent share of sales tax on motor fuel would generate approximately $855 million.
