Illinois considers local gas taxes atop doubled state gas tax
Illinois has the second-highest gas taxes in the nation, but a new bill would let cities add a local gas tax on top of the state and federal taxes and fees. Illinois doubled its gasoline tax in 2019, part of $5.2 billion in new taxpayer costs since Gov. J.B. Pritzker took office.
Illinois is No. 2 for high gasoline taxes, but Illinois lawmakers face a proposal to drive them even higher by adding local gas taxes to the list that includes a state gas tax that was doubled in 2019.
House Bill 4424, filed Jan. 10, gives local governments the power to impose a municipal motor fuel tax. State Rep. Michael Zalewski, the bill’s sponsor, isn’t in a hurry to get it to a floor vote.
“We’ll take our time with it and we’ll determine if it’s the right time to proceed or if we’re going to wait a while,” said Zalewski, D-Riverside. “So, very slow going, for sure.”
Currently, only municipalities in counties with more than 3 million people can impose a local gas tax, which means only Chicago and other Cook County municipalities. HB 4424 would expand the power to all municipalities in Illinois.
The state gas tax was doubled from 19 cents to 38 cents in 2019 as part of a $45 billion infrastructure plan. The gas tax automatically increases every July 1 at the rate of inflation, a mechanism that lets lawmakers escape unpopular votes to raise the tax.
The hike drove Illinois gas taxes to No. 2 in the U.S. Only a few years ago, Illinois’s gas taxes were 10th highest.
Illinoisans currently pay $5.24 billion more from 24 new taxes and fees since Gov. J.B. Pritzker took office. The doubled gas tax was one of them.
Josh Sharp, president and CEO of the Illinois Fuel and Retail Association, said gas taxes are high enough. Local governments already get 15% of the state’s motor fuel tax revenue, and a cut of the state sales tax.
“We really don’t think that there’s a huge need in the state of Illinois to be sending more money to local government or allowing local government to tax more than they already are because they’re already getting a huge cut of the revenue that’s already out there,” Sharp said.
Illinoisans near border states can easily drive over to save at the pump, especially near Missouri with its second-lowest gas taxes in the nation.
Zalewski says the bill is just a starting point for “gauging interest” to see what people have to say.
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