Lightfoot abandons gas tax cut for gas, transit card lottery

Lightfoot abandons gas tax cut for gas, transit card lottery

Chicago Mayor Lori Lightfoot will raffle gas and mass transit cards instead of cutting her new 3-cent gas tax. The shift follows aldermen questioning how much a gas tax cut would cost the city.

Mayor Lori Lightfoot walked back her proposal to lift Chicago’s 3-cent gas tax March 31 amid record prices at the pump. Instead, she said the city will offer gas and Ventra cards to residents.

The relief plan the mayor dubbed “Chicago Moves” would offer $7.5 million in prepaid gas cards to motorists and $5 million in prepaid mass transit cards over four months to winners of a citywide rolling lottery.

The shift in tactics comes after the City Council Finance Committee abruptly canceled a hearing last week on Lightfoot’s plan to reduce the city’s gas tax from 8 cents a gallon to 5 cents. The proposed tax break would have saved an estimated $18 million at the pump through the end of 2022.

The lottery will offer 50,000 prepaid gas cards worth $150 each starting in May through the summer in anticipation of persisting high prices at the pump. The cards will be valid at gas station within city limits for one year.

The city will also raffle 75,000 Ventra cards with a $50 value to “CTA-utilizing residents in low-income neighborhoods.” An additional 25,000 cards will be distributed citywide.

To qualify for the lotteries, motorists must be a Chicago resident 18 or older with an individual income less than $91,000 or less than $140,000 for a family of four. Gas card seekers must also have purchased a valid $96 city sticker.

While initially proposing a temporary – or permanent – repeal of the 3-cent gas hike imposed in January 2021, reports said Lightfoot opted for the prepaid cards thanks to pressure from aldermen and union leaders concerned over the decrease in city revenues.

Chicagoans have experienced three gas tax increases in the past 18 months. They now pay an 8-cent city gas tax, an additional 39 cents in state taxes and 6 cents in Cook County taxes.

Prices at the pump in Chicago were the highest anywhere in the state at $4.84 a gallon. The Illinois average was $4.46 and U.S. average $4.22 on April 1.

The bulk of gas taxes comes from the 39-cent per gallon state tax. Illinois’ gas taxes became the second highest in the nation when Gov. J.B. Pritzker doubled the state’s 19-cent gas tax in 2019. The hike was to pay for a $45 billion infrastructure package, which included political pork projects.

City drivers pay another 10% of the before-tax price of gas at the pump in sales taxes. All told, taxes add about $15 to every fill-up in Chicago.

Patrick De Hann, head of petroleum analysis at GasBuddy, said these new prices will be the longest lasting in history.

“It’s a dire situation and won’t improve anytime soon. The high prices are likely to stick around for not days or weeks, like they did in 2008, but months,” De Haan said.

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