State transportation and transit agency revenue in Illinois generated $1 billion less than expected over the past year due to pandemic-related declines in fuel consumption, sales taxes, and transit ridership, according to a new study by the non-partisan Illinois Economic Policy Institute (ILEPI).
The state's 2019 Rebuild Illinois capital infrastructure plan was estimated to boost Illinois’ state transportation revenues by almost $2 billion annually.
“The COVID-19 pandemic has had costly and disruptive impacts on people, businesses, and institutions in every corner of our state,” study author and ILEPI Transportation Analyst Mary Tyler said in a statement. “While some sectors, including transportation, are beginning to rebound, they continue to lag well behind pre-pandemic levels. And it’s important to understand these impacts have significant implications not just for the future implementation of the Rebuild Illinois capital plan, but the state’s broader post-pandemic economic recovery as well.”
The state’s major transportation revenue streams—motor fuel taxes (MFT) and transit system fees—saw their steepest declines in the two months immediately following the state’s March 21st stay-at-home order. During this period, statewide vehicle miles traveled (VMT) were as much as 40% less in 2020 compared to 2019. The state’s overall VMT finished the first year of the pandemic down 15% compared with pre-pandemic levels, and ridership for various Chicago area transit systems fell an average of between 50% and 90%. As of yet, neither has recovered back to pre-pandemic levels.
Illinois’ MFT revenue is distributed to multiple state funds that support the Illinois Department of Transportation (IDOT), local governments, and transit agencies. The report notes that the $308 million in COVID-related MFT losses translates into a loss of $151 million for the state Road Fund and State Construction Account, $30 million for capital funding for transit agencies, and $126 million for statewide local governments.
While motor fuel taxes represent two-thirds of the new annual revenue for the state’s $45 billion infrastructure modernization effort, the declining ridership for Chicago area transit systems and a loss of local sales tax revenues that fund the Regional Transit Authority (RTA) have also been adversely affected by the pandemic.
SOURCE: Illinois Economic Policy Institute