At a special meeting of the North Riverside Village Board on Sept. 23, trustees voted unanimously to impose a 2-cent per gallon tax on the sale on motor fuel sold in the village. The tax takes advantage of a new state law that allows non-home rule communities to impose a municipal motor fuel tax of up to 3 cents a gallon.

Previously non-home rule communities were not allowed to impose a gas tax without a referendum.

The decision to enact a two cents a gallon gas tax came after Mayor Hubert Hermanek Jr. and Village Administrator Guy Belmonte earlier in the day with officials of Costco, who had expressed concern about an earlier proposal to impose the maximum 3-cent  per gallon tax.

“We came to a compromise that will benefit both the village and satisfy Costco,” Hermanek said.

Costco is by far the leading seller of gas in North Riverside. Its store at 2500 Harlem Ave. sells approximately nine million gallons of gas annually. That would generate about $180,000 in new revenue for the village, much of it paid by drivers who do not live in North Riverside.

There are two other gas stations in North Riverside, the BP/Amoco at 2558 Desplaines Ave. and a Citgo station at 8548 Cermak Road. In total, the new gas tax could generate close to $200,000 annually for the village. That money would go into the village’s general fund.

“It’s a revenue avenue we never had before,” Belmonte said.

The action Monday night followed a decision by North Riverside Village Board on Sept. 16 to table a vote imposing a 3-cent per gallon tax, just a week after members of the board unanimously agreed that the tax would be a critical new revenue stream that could help reduce a projected budget deficit for the 2019-20 fiscal year.

In an interview following the vote, Mayor Hubert Hermanek Jr. said the delay was prompted by a request from officials at Costco to talk about the village’s proposed action. The sale of gasoline at Costco alone was projected to bring in as much as $250,000 per year.

“Costco contacted us and they wanted to sit down and discuss it,” said Hermanek. “I thought it would be rude to pass it without having them discuss whatever issues that they had,” said Hermanek.

The 3-cent per gallon gas tax law passed by the Illinois General Assembly earlier this year was done so to benefit non-home rule communities like North Riverside, which have fewer powers under state law to impose taxes than home rule communities.

Municipalities with populations greater than 25,000 are automatically granted home rule status. Home rule status can also be conferred on smaller communities, like tiny Bedford Park and McCook, if residents vote to make their municipality home rule.

Home rule communities in Illinois have the power to impose a local tax on motor fuel sales, and many have chosen to do just that – including many municipalities where Costco has stores.

While there are some exceptions to that rule, most home rule communities where Costco stores are located have imposed local gasoline taxes. In places like Bloomingdale, the tax is 2 cents per gallon. In Melrose Park, where Costco opened a warehouse in 2010, the municipality subsequently imposed a 3-cent per gallon tax, while Naperville’s local gas tax is 4 cents per gallon.

The city of Chicago, where Costco has three locations, has a gasoline tax of 5 cents per gallon, while Bolingbrook has imposed a gasoline tax of 9 cents per gallon.