DeKalb residents could see 4 cent gas tax increase as city council mulls funding options

DeKALB – DeKalb residents could see a 4-cent increase in the local gas tax, though the City Council has not yet made a final decision.

As the city continues its fiscal 2020 budget discussions, staff and council will review various options for generating revenue and addressing budget shortfalls amid the pension crisis. No vote was held and no decision is final, although the City Council on Monday gave their go-ahead for staff to bring forward a possible 4-cent increase on local fuel taxes for a vote at a later date. The tax is estimated to generate an additional $690,000 for capital needs in the city.

City Manager Bill Nicklas said that maintaining road repair and vehicles used for police, fire and the public works departments is costly, and it is something not properly prioritized in past budgets, he said.

"It eats up a lot of money," Nicklas said. "We're not talking here about turning over pickup trucks every three years and fire trucks every 10. We're trying to make a dent through some funding, a backlog of $4.3 million. So how do we do that?"

DeKalb currently charges 5.5 cents a gallon gas tax, which is split between roads (4 cents) and airport expenses (1.5 cents), according to city documents.

Nicklas presented three funding options: a property tax increase (fiscal 2020 proposes a 1.2% city tax rate and a $7 million tax levy), a 0.25% Home Rule Sales Tax or a local fuel tax increase, the latter being an option the council preliminary ruled in favor of.

Second Ward Alderman Bill Finucane said he was “very comfortable” with the suggested fuel tax increase, which would affect local tax only, since the state motor fuel tax is set.

The state in July imposed a 19-cent increase in the fuel tax, meant to generate $45 million for capital infrastructure projects.

“You ask yourself are people going to pass by a DeKalb fuel station to go to Sycamore for 4 cents?” Nicklas said. “I don’t know. I doubt for the 4 cents that would be the case, but then we don’t have four-dollar gasoline right now. It’s a tough choice.”

Road maintenance needs to be better addressed in the 2020 city budget, too, Nicklas said.

“We are in some cases losing roads and we don’t have any means to repair them,” Nicklas said. “If we only focus on the ones we’re losing, then we’re going to lose more.”

Preliminary drafts of the fiscal 2020 budget place the numbers at about $104 million, with an operating fund of $38 million and $61 million for pension funds, Nicklas said.

He and the rest of the city staff will work to complete a full budget draft by Nov. 15, after which time he plans to hold a two-night workshop with the advisory committee and City Council to hash out priorities. The budget then will move to a public hearing and seeking council approval in December.