Illinois municipalities push for local fuel tax as gas prices rise
[March 05, 2026]
By Jim Talamonti | The Center Square
(The Center Square) – Some Illinois municipal leaders are pushing for
the ability to impose local fuel taxes at a time when gas prices are
rising dramatically.
Mt. Vernon Mayor John Lewis spoke during an Illinois Municipal League
press conference at the Illinois Capitol on Wednesday.
Lewis said, under current state law, only non-home rule communities in
Cook County or those with a population more than 100,000 can impose a
local motor fuel tax without a referendum.
“This creates an uneven system that limits financial flexibility for
many, many of our small communities,” Lewis said.
State Rep. Chris DeLuca, D-Chicago Heights, introduced House Bill 1283
last year.
The measure provides that all municipalities may impose a motor fuel tax
in 1-cent increments, capped at 3 cents a gallon.
“This legislation preserves local control by allowing municipal
officials who are accountable to their residents to determine whether to
adopt the tax, at what level and for what purpose,” Lewis said.
According to AAA, the average regular gas price per gallon in Illinois
increased more than 30 cents in the last week to $3.32.
A AAA spokesperson said oil is part of a global market, which means when
there’s a disruption or shortfall in one part of the world, it affects
other parts too.
“The Strait of Hormuz is a vital connector between the Persian Gulf and
open waters. Iran has reportedly closed the strait and many oil tankers
have been hesitant to enter it with military operations happening
nearby, which means that oil deliveries are being slowed,” the
spokesperson said in a statement to The Center Square.
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AAA said the longer the U.S. conflict with Iran continues, the more
impact and the longer the impact we’re likely to see on gas prices.
The municipal leaders’ call for new taxing power comes after Gov.
J.B. Pritzker proposed reducing the percentage of state revenues to
be shared with local governments.
Matteson Mayor Sheila Chalmers-Currin said cutting the Local
Government Distributive Fund from 6.47% to 6.28% of individual
income tax revenues as Pritzker proposed would eliminate natural
revenue growth that municipalities rely on.
“These are local dollars generated by our residents and businesses
that are shared back to communities to fund police protection, fire
service, road maintenance, infrastructure and other essential
services,” Chalmers-Curtin said.
Lewis supports the local gas tax proposal even though Mt. Vernon is
a home rule community.
“The transportation networks that connect our communities do not
stop at our municipal boundaries, and the funding challenges faced
by neighboring non-home rule communities directly affect the region
as a whole,” Lewis said.
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