Group calls for a 4 cent gas tax hike

2014-04-02T00:00:00Z Group calls for a 4 cent gas tax hikeKurt Erickson Lee Springfield Bureau
April 02, 2014 12:00 am  • 

SPRINGFIELD | Motorists could pay higher taxes at the fuel pump in order to ensure Illinois roads don't fall into disrepair under a plan floated Tuesday by a coalition of business and labor groups.

The Transportation for Illinois Coalition said a 4 cent boost in the gas tax would be just one part of a financing package that could provide $1.8 billion per year in funds for road and bridge repairs.

The push comes as the state's current $31 billion construction program ends July 1. The federal transportation program ends in October.

"We believe this is a critical issue that must be addressed," said coalition co-chairman Doug Whitley, president of the Illinois Chamber of Commerce.

In addition to raising taxes, the package relies on ending diversions of motorist-related taxes and fees to the state's general checkbook.

For example, a separate sales tax collected on fuel purchases raises about $800 million, which would generate the bulk of the revenue for the group's proposal.

However, diverting that cash to roads would leave a hole in the state's regular budget at a time when Gov. Pat Quinn and the General Assembly are already threatening to make the state's temporary income tax increase permanent in order to avoid drastic cuts to programs.

The plan also would generate $180 million by ending a credit for ethanol producers.

In addition, the proposal calls for the state to begin taxing car-related services like repairs, oil changes and car washes.

Whitley said they are outlining the plan now in order to put the issue on the radar screen of lawmakers.

"I think its premature at this point to think what's going to happen," Whitley said. "I think they all recognize the need. No one wants to have a collapsed bridge."

The current gasoline tax is 19 cents per gallon, but because Illinois also charges a separate sales tax on fuel sales, the overall cost is higher than most states.

The Tax Foundation ranks Illinois gas taxes as fifth highest in the nation..

A coalition of gas station and convenience store owners oppose the plan, saying it would cause extra "pain at the pump."

"Consumers are frustrated and gas stations are suffocating — especially near the borders — due to Illinois already having the highest fuel taxes in the Midwest," said Bill Fleishli, executive vice president of the Illinois Petroleum Markets Association.

Lawmakers are working toward a May 31 deadline to put together a spending plan for the fiscal year beginning July 1.

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