CHICAGO - Instead of forfeiting $18 million in revenue by offering a temporary reprieve from her own gas tax hike, Mayor Lori Lightfoot announced a new program that will have the city will providing financial assistance for motorists and mass transit riders.
Chicago Moves is a financial assistance program aimed at providing financial relief for Chicago residents struggling with transportation expenses, making Chicago the first and largest major city in the country to do so. The program aims to help combat spiking costs of gas and rising inflation by providing $12.5 million in relief funding for disadvantaged Chicagoans, according to a news release from the city.
The program will be comprised of $7.5 million earmarked for $150 physical prepaid cards eligible for redemption at local Chicago gas stations as well as $5 million earmarked for $50 prepaid cards eligible for use on public transit, the release states.
"The last two years have been exceedingly difficult for many of our residents, in particular our most vulnerable populations. Through the pandemic, we have collectively faced tragedy, and many among us have faced accompanying economic hardship. Now, as inflation steadily rises and the cost of gas continues to soar, our disadvantaged residents are carrying a significant financial burden," said Mayor Lightfoot. "Chicago Moves endeavors to provide much needed relief and ease some of this pain. By subsidizing the cost of gas and transit, this program will enable participants to save their resources for other critical expenses. Chicago is a city that moves. People have to be able to get to work, school, places of worship, medical offices, grocery stores. The goal of this program is to help make those moves easier."
According to the release, up to 50,000 physical prepaid cards of $150 will be distributed to eligible residents via a lottery system. These cards will be valid for one year after receipt and may only be spent on the cost of fuel at gas stations located within Chicago. Applications are limited to one per household. Beginning in May, cards will be distributed in five successive monthly waves of 10,000 residents.
Over the past several months, domestic and international pressures have forced the cost of gas to record highs. According to data from AAA and the Center for Neighborhood Technology (CNT), Chicagoans are now paying an average of 4.5% of their annual income at the pump, compared to 3.1% of their annual income one year ago, the release states. This 1.4% increase is consistent with statewide trends, where the cost of gas has similarly risen by approximately $1.45 per gallon over the last year as well as nationwide trends, where the cost of gas has increased by $1.38 per gallon over the previous year. According to the same findings, Americans are now spending nearly $70 each time they fill up their tanks.
"This is a huge step toward making Chicago more accessible to those having to choose between gas, a ride on the CTA, or the grocery store. Especially for essential workers who do not have the choice to work remotely, this is a way to provide many folks relief as they commute to work each day," said Chicago City Clerk Anna Valencia. "I look forward to continuing this partnership with Mayor Lightfoot and our city's leaders to help those experiencing economic hardship breathe a sigh of relief."
The release states that to make this program possible, the city has partnered with Fifth Third Bank and Onbe, a market-leading corporate disbursements fintech. Fifth Third and Onbe are providing the physical prepaid cards and payment processing for the program with no transaction fees, enabling the entirety of the program funding to be provided directly to residents.
"Fifth Third Bank is pleased to support the City of Chicago and those eligible for Chicago Moves. We recognize the importance of the role we play in our communities, especially in the most challenging of times," said Mark Hoppe, Regional President of Fifth Third Bank, Chicago.
"Together with Fifth Third, we’re offering the City of Chicago a faster, more strategic way to distribute funds to residents," said Bala Janakiraman, CEO of Onbe. "The City of Chicago can expect a seamless payments experience that ensures Chicago residents quickly receive their cards with no transaction fees. As active members of the Chicago community, we’re pleased to lend our expertise to the Chicago Moves program."
Last week, the City Council’s Finance Committee abruptly canceled a hearing on Lightfoot’s plan to roll back the 3-cents-a-gallon increase in the city’s gas tax that was included in her 2021 "pandemic budget."
That gas tax, now 8 cents a- gallon, generates $64.9 million a year for snow removal, street paving, bridge maintenance and related personnel costs.
Ald. Howard Brookins (21st), chairman of the Transportation Committee, said he understood the mayor’s motives. But he argued that motorists needed "significant relief," and that "cynics" would slam the idea.
"If it was me, I would probably not do it, to not feed into the cynicism of the public that you’re just doing something as a political stunt," Brookins said.
Other alderpersons and union leaders also urged the mayor to steer clear of the temporary tax waiver, fearing it would deprive the city of sorely-needed revenue and, potentially, delay capital projects bankrolled by the gas tax.
As a result, Lightfoot has now all but abandoned the temporary waiver.
Instead, she’s talking about the commuting equivalent of guaranteed basic income. That is, offering gas cards to motorists and Ventra card credits to CTA riders.
Specifics of the giveaway were still being worked out.
Brookins said gas cards would be better than a temporary tax reprieve.
"Think about it. You fill up your car. It takes 20 gallons of gas. It’s $100. And we’re gonna save you 60 cents. I just don’t think anyone would have seen that as being anything meaningful," he said.
Over the last two weeks, mayoral challenger Willie Wilson has held two gas giveaways. The first generated massive traffic jams as motorists lined up for hours to get $50 worth of gas until $200,000 ran out. The second freebie was larger, but less chaotic. About four dozen stations in the city and suburbs pumped $1 million worth of gas into motorists’ tanks.
"Willie Wilson has shown to us that people will wait in long lines to get the 50 bucks. That can be a welcome [break] for a majority of people. I just wish we could somehow tie it to need," Brookins said.
Brookins also questioned the need for a Ventra card credit. He noted that, unlike skyrocketing gas prices now hovering around $5-a-gallon or more, CTA fares have been frozen for years.
Ald. Gilbert Villegas (36th), chairman of the council’s Latino Caucus, agreed that offering motorists a $50 gas card would be better than a partial reprieve from Lightfoot’s gas tax hike.
"That continues to have the [gas tax] revenue stay in place. It helps the people, but also makes sure we don’t put a hole in our budget," Villegas said.
"I would say $50 is the right amount. That’s about half-a-tank now, if you think about it."
He argued the mayor’s original plan was "more ceremonial" than real.
"You fill your tank up with 15 gallons. You saved the consumer 45 cents versus the gas card, which would really help people by giving them some breathing room," Villegas said.
The mayor’s office refused to comment on the change in strategy on the day Lightfoot kicked off Chicago’s 2022 construction season, which includes the second year of her five-year, $3.7 billion capital plan.
The Sun-Times Media Wire contributed to this report.