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Urbana staff recommend raising local motor fuel tax to 12¢ with CPI indexing; council debates phased approach, diesel capture and equity
Summary
Public Works Director Tim Cowan recommended increasing Urbana’s local motor fuel tax from 5¢ to 12¢ per gallon with a CPI‑U inflation index, projected to yield about $1.08 million per year; councilmembers asked for options for staged increases, a diesel component and information on equity impacts for low‑income residents.
Urbana Public Works Director Tim Cowan presented a comparative analysis and the need for a local motor fuel tax market‑rate adjustment, recommending the highest option considered: a gasoline component of 12¢ per gallon together with a CPI‑U inflation factor (Option 4).
Cowan said the city's pavement condition index has declined into the "poor" category and that state and federal special funding (including Rebuild Illinois) created temporary spikes in recent years that are now waning. He noted construction costs have risen significantly…
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