Two examples of suburban governments addressing COVID-19 budget shortfalls: raise the gas tax, delay improvements

The COVID-19 reckoning for municipal budgets is ongoing. Two examples from the end of this week. First, DuPage County is raising its gas tax:

The DuPage County Board has approved a doubling of the 4-cents-per-gallon gas tax in response to revenue losses amid the coronavirus pandemic.

The new rate goes into effect July 1. The existing rate has been in place since 1989.

According to county transportation officials, gas tax proceeds have fallen nearly 25% since April as more people have been staying home and working remotely. The gas tax increase is expected to raise $16 million more a year for an aging system of roads and bridges.

Second, Naperville is putting off one downtown project:

A multimillion-dollar streetscape project in the heart of downtown Naperville is being postponed to mitigate the burden on businesses already struggling under COVID-19 restrictions.

Initially slated for completion last spring, the $3.2 million in proposed improvements — plus an additional $2.2 million in related utility work — were delayed a year due to the challenges and uncertainties of the pandemic, officials said.

These illustrate two different strategies for tackling a budget shortfall. The first tries to raise more revenue. The gas tax is a relatively small increase for each purchase but it adds up since so many suburban lives are dependent on driving. That this tax from the county has not increased for over thirty years is likely to be a small comfort for many as other costs have increased as well. But, raising a number of taxes and fees without huge jumps in any one of them can help local governments close the budget gap.

The second example pushes off planned costs to the next year. Each year, local governments consider improvements and capital projects that will improve the infrastructure of their community. Even in a good year, a number of projects may be dependent on funding from outside sources such as state governments or the federal government. This year, when money is scarce all around, some projects will be pushed into the future. This may not be a big problem for now – unless a lot of projects get pushed back, future budgets cannot handle everything, and infrastructure slowly falls apart. If this year’s budget is bad and next year’s is also affected, when will these local projects get done?

More communities will be making similar decisions in the weeks ahead. How much each community is affected may differ as might their strategies for addressing the budget issues.

One thought on “Two examples of suburban governments addressing COVID-19 budget shortfalls: raise the gas tax, delay improvements

  1. Pingback: Major highway projects continue in the year of COVID-19 | Legally Sociable

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