Urbana Mayor Continues to Press for Local Motor Fuel Taxes

Urbana Mayor Laurel Prussing's motor fuel tax plan faces charges from critics who say it would raise gasoline prices in the city. But the mayor and chief of staff told council members Monday night that other towns with their own motor fuel taxes haven't had that problem.

Mike Monson, the mayor's chief of staff, says he talked with officials at six downstate cities with motor fuel taxes, including Danville, Tilton, Galesburg and Peoria.

"I talked to them about the competitive effect, " says Monson. "They seemed to think there wasn't much of a price differential between stations that were within the city that were collecting this tax, and stations in nearby communities and unincorporated areas that didn't have it."

But Monson walked back from earlier estimates that a two-cent a gallon gasoline tax could raise a half million dollars a year for Urbana. He now thinks the number would be more like $350,000. City Public Works Director Bill Grey says that would still be enough to help keep up with street maintenance.

"We really need to do more work with resurfacing streets, and seal-coating, crack-sealing and patching streets", says Grey. "So two cents would be a big help." :

Prussing argues that a 2-cent per gallon motor fuel tax would would be barely noticeable --- if passed on to customers --- because gasoline prices already vary widely from one gas station to another. Prussing says she did her own survey of gas station prices last Friday, and found a 23 cent difference between the highest and lowest prices.

"So a 23 cent difference between two gas stations in the same city is more than ten times as much as a two cent tax", says Prussing. "We don't think the tax will get passed on, but if it does, it's still a very small amount, compared to the daily changes and the differences between stations."

Still Republican Alderwoman Heather Stevenson was unconvinced. She said she worried gas stations just outside the Urbana city limits --- in Champaign to the west and Urbana Township to the east --- could take customers away from gas stations in Urbana, if a motor fuel tax passes.

Mayor Prussing says a city gasoline tax is needed, because revenue from the state's motor fuel tax and Urbana's s general fund have not kept up with inflation. She says discussion of the proposed tax will continue at a later council meeting.