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North Riverside moves to impose gasoline tax

Officials say Costco sales will result in $250K annual windfall

September 10th, 2019 12:54 PM

Mayor Hubert Hermanek Jr. said the village's lobbyist had North Riverside specifically in mind when pushing for the state's new 3-cent-per-gallon gasoline tax, which was approved earlier this year.

By Bob Skolnik

Contributing Reporter

If you fill up your gas tank in North Riverside a few weeks from now, it will cost you 3 cents a gallon more than it does now. 

The North Riverside Village Board is poised to take advantage of a new state law passed and signed into law earlier this year that allows non-home rule communities to enact a municipal motor fuel tax of up to 3 cents a gallon without having to get approval from voters in a referendum.

The main attraction of a gas tax for North Riverside is the presence of the Costco at 2500 Harlem Ave. Village Administrator Guy Belmonte estimated that Costco sells about 9 million gallons of gas there annually, which would mean about $270,000 in new revenue for the village, which has faced financial challenges in recent years.

Mayor Hubert Hermanek Jr. said at a village board committee meeting on Sept. 9 that the new law was passed by the state legislature with North Riverside in mind.

"Our lobbyist worked hard for it with the Illinois Municipal League, and they knew that basically North Riverside was targeted, or we wanted it, because we're the non-home rule [community] with the Costco," said Hermanek.

Hermanek said that a particularly attractive feature of the municipal gas tax is that it would be mostly paid by people who don't live in North Riverside.  

"Probably 90 percent, or more, of the people who buy Costco gas don't live in the village," Hermanek said. "We can get $250,000 in taxes from people who don't live here."

Because gas at Costco is 25 to 30 cents cheaper than at other gas stations, an additional 3 cents a gallon added to the cost as a result of the tax would not result in many customers choosing to go elsewhere to buy gas, Village Manager Guy Belmonte told the board.

The revenue from the municipal gas tax will go into the village's general fund and can be used for any purpose.

"You don't get that many chances to find a new revenue source and it's a good revenue source," Belmonte said. 

In addition to Costco, there are two other gas stations in North Riverside, a Citgo at 8545 Cermak Road and a BP/Amoco at 2558 Desplaines Ave.

Ajay Lakhan, the owner of the Citgo gas station on Cermak Road, said that a new tax would just make it tougher for him to sell gas. He said it is already hard to compete with gas stations a few miles west in DuPage County, where taxes are already lower.

"Who's going to stop here," Lakhan said when asked about the likely effects of a new tax. "They can go three miles further to DuPage."

An informal poll of village board members attending the Sept. 9 committee meeting showed unanimous support for the municipal gas tax.

"It's a no-brainer," said board member H. Bob Demopoulous.

The revenue from the gas tax could go a long way towards reducing the village's projected $313,000 budget deficit for the 2019-20 fiscal year. 

The new gas tax is expected to be formally approved at the village board's meeting on Sept. 16 and go into effect shortly thereafter.

This story has been changed to correct a statement about how much gasoline Costco sells annually. The figure is reportedly 9 milllion gallons. The Landmark regrets the error.