SPRINGFIELD, Ill. — Illinois Gov. J.B. Pritzker wants relief for pocketbook-pinched consumers when they visit the filling station.
Gas averages $3.60 per gallon statewide and inflation is at its highest rate since 1982. Pritzker, a Democrat facing reelection this year, last week proposed freezing the motor fuel tax, which is scheduled to jump 2 cents on July 1. It’s part of his state budget plan that also offers breaks on property taxes and grocery sales tax.
WHY IS THE MOTOR FUEL TAX INCREASING?
The $45 billion Rebuild Illinois capital construction plan in 2019 is funded in part from doubling to 38 cents per gallon the motor fuel tax, which funds transportation projects. It had stood at 19 cents per gallon for nearly 30 years, so lawmakers enacted annual increases tied to inflation.
It’s 39.2 cents now. Without action, it will increase to 41.4 cents in the fiscal year that begins July 1. The freeze would save 35 cents when filling a 16-gallon tank — if the retailer, who pays the tax, passes it on.
HOW MUCH WOULD IT COST THE CONSTRUCTION PROGRAM?
It would reduce Rebuild Illinois funding by $135 million. That’s just 0.29% of the $46.5 billion capital construction plan Pritzker proposed for next year. It will not affect projects planned for the coming year, Deputy Gov. Andy Manar said.
“These aren’t easy choices,” Manar said. “But the governor recognizes … that inflation is impacting working families in the state. So he is focused on the cost of groceries, the cost of gasoline, and the burden that property taxes place on working families.”
DOES THAT LOSS HAVE FUTURE REPERCUSSIONS?
That’s a key argument of critics. Shave money from the program for fixing a pothole this year and there may be two or three potholes when you get to it — along with inflationary cost increases for material and labor.
Kevin Burke III, business co-chair for the Transportation for Illinois Coalition, said $135 million isn’t for one project that’s finished in a year. It’s pieced out among multiple jobs and potentially delays each.
“The longer you take to do stuff, the more problems you’re going to have, and the more expensive the project is going to be,” Burke said. “The whole purpose of the index was so that we we don’t get into the position where we don’t fund our roads properly for 20 to 30 years.”
ISN’T ILLINOIS GETTING FEDERAL INFRASTRUCTURE MONEY?
That’s another reason Pritzker feels confident. The Infrastructure Investment and Jobs Act that President Joe Biden signed in November will bring Illinois $3.8 billion over the next five years in addition to $14 billion already planned, according to the transportation coalition.
THEN WHY ARE TRANSPORTATION ADVOCATES COMPLAINING?
Because they say the need is so great. The money generated in the Rebuild Illinois plan was not enough to fix all the problems in the state, Burke said.
And even with additional federal money, the state shouldn’t back off, said Ed Maher, spokesman for the International Union of Operating Engineers Local 150.
“It’s not as though we started this on a level playing field,” Maher said. “Our infrastructure was underfunded for decades so we’ve got a massive game of catch-up to play here. Now is not the time to start taking money out of that.”
IS THE MOTOR FUEL TAX THE ONLY FUEL TAX?
No. Motorists also pay 18.4 cents a gallon in federal taxes and 1.1 cents per gallon to fund cleanup of abandoned leaking underground storage tanks.
Additionally, Illinois is one of 16 states that charges sales tax on motor fuel. Consumers pay 6.25% on the final pump price.
WHERE DOES THE SALES TAX GO?
Traditionally, it’s been paid into general operating funds, although that’s changing, too. Rebuild Illinois ordered that each year for five years, incrementally larger portions of sales tax receipts go to the road fund until it reaches 80%, with the balance going to local governments. The share stands at 16% and would go to 32% July 1.
Senate Republicans introduced a broad-based tax-relief plan last week that includes reducing the sales tax on gas to 5.25% while accelerating the annual road-fund transfer to 53%, adding $80 million.
On a 16-gallon fill-up at $3.60 per gallon, that’s a savings of 58 cents.
ISN’T THERE A BAR ON USING ROAD FUND MONEY FOR OTHER PURPOSES?
Yes, but it doesn’t apply here. In 2016, a prohibition on “sweeping” the road fund was approved by 79% of voters. The Lockbox Amendment ended years of subsidizing other parts of the budget with road money.
Pritzker’s freeze would mean the state collects no money and therefore, no one can sweep it.
But it sets a precedent, say critics, and state officials have lived to regret taking “holidays” from paying annual obligations, notably toward employee pensions.
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This story has been updated to correct that five-year federal road funding for Illinois before the infrastructure act had been $14 billion, not $17 billion.
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Follow Political Writer John O’Connor at https://twitter.com/apoconnor
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