Motorists, get ready – here come the tax increases.
The gasoline tax bidding war is off and running in Springfield, and, like many auctions, the bids are getting higher.
It was just a couple of months ago that the Illinois Chamber of Commerce proposed a 25-cent per gallon increase to finance an infrastructure building plan.
Now state Sen. Martin Sandoval, a Chicago Democrat, has taken that suggestion and considerably upped the stakes for taxpayers.
Where all this ends up between now and the end of the month, when the General Assembly’s current term ends, is anyone’s guess. But it seems clear that Illinois’ gas tax of 19 cents a gallon (plus a sales tax on top of the gasoline tax) is on the way up.
In March, the chamber sent up a trial balloon proposing phasing in increases that would raise the tax per gallon from 19 cents to 44 cents. At the same time, it recommended repealing the sales tax imposed in addition to the gasoline tax, estimating that the changes would generate another $2 billion.
The money, of course, would go for road improvements included in a capital improvements bill, which often is characterized as a pork-fest. That’s because every legislator in the state will seek money for projects that may – or may not – be needed.
The chamber’s move signaled bipartisan interest in raising gasoline taxes to support construction projects that business and labor interests, each for their own financial reasons, support.
The chamber plan calls for a 15-cent-a-gallon increase on July 1 and another 10 cents in increases phased in over 5 years. The chamber also called for tripling the annual registration fee for electric vehicles – raising it from $98 to $294.
That proposal raised eyebrows. But Sandoval’s tax plan has eyes bulging.
He wants to boost the gas tax to 44 cents a gallon, raise driver’s licenses fees from $30 to $60, increase the vehicle registration fee from $98 to $148 and raise the fee for registering electric cars to $1,000. His proposal also would provide for automatic gas tax increases every year based on inflation, a move that would insulate legislators from having to vote for future increases.
Sandoval’s plan would leave the current sales taxes imposed on top of the gasoline tax in place.
The plan – or portions of it – would give Illinois the highest gasoline taxes in the nation, and that doesn’t include local levies.
It’s pretty clear that Gov. J.B. Pritzker, despite his campaign statements to the contrary, is on board with much of what’s being proposed.
Not only does he support a capital bill, he can use it to reward or punish legislators who do not support his other tax proposals – House members voting on putting his progressive income tax amendment on the November 2020 ballot – by granting or withholding their share of the pork pie.
There’s a risk for political blowback. Legislators would be taking a big chunk of change out of people’s pockets every time they re-fill their gas tanks. Our public servants would prefer to take as much as they can, but it’s really a question of how much they dare.
They justify it by stating and restating that Illinois’ roads and bridges are “crumbling,” an exaggeration at best. Clearly, maintenance is needed. But maintenance is always needed, particularly in the warm weather months. How much is enough?
That’s a tough issue in every state, but especially in Illinois. In the Land of Lincoln, too many other budget items – skyrocketing pension and Medicaid costs to name two – crowd out spending for core state programs that include the maintenance and construction of roads, highways and bridges.