Rahm to Springfield: State gas tax needs to at least double

Rahm to Springfield: State gas tax needs to at least double

Departing Chicago Mayor Rahm Emanuel accelerated calls to boost Illinois’ gas tax to pay for local transportation projects.

Chicago Mayor Rahm Emanuel is racing to secure new capital funding from the state before his final term ends. His plan to pay for new road construction? At least doubling the statewide gasoline tax.

At a Dec. 11 news conference, the outgoing mayor recommended the state hike its gas tax by 20 to 30 cents per gallon, according to the Chicago Tribune. Emanuel, accompanied by suburban Chicago-area mayors, also urged higher charges on owners of electric vehicles, but did not offer further details.

Even at the lower end, Emanuel’s proposed hike would squeeze Illinoisans, and Chicagoans in particular. On top of existing motor fuel taxes at the federal, state and local levels, as well as the city’s high sales tax burden, a 20-cent per-gallon tax hike would raise the cost of filling up a 15-gallon gas tank by $3. A 30-cent hike would raise that cost by $4.50. The average motorist using 656 gallons would pay between $130 and $200 more in taxes per year.

Emanuel’s desired range for a gas tax hike is highest among those recently floated by state and local leaders. Illinois Department of Transportation Secretary Randy Blankenhorn called for a gas hike of “at least 15 cents” at a Dec. 5 event hosted by the State Journal-Register and the Better Government Association.

Emanuel’s administration made a similar appeal to state lawmakers in November, during a City Club of Chicago luncheon. Featured as an event speaker, Chicago Department of Transportation Commissioner Rebekah Scheinfeld called upon Springfield to “seize the opportunity” to bankroll the city’s transportation needs, noting that the outgoing mayor “has been specific about a gas tax.”

The state last passed a capital bill in 2009, when it appropriated $31 billion for infrastructure projects. Emanuel has long put a new capital bill, fueled by a gas tax hike, at the top of his wish list. Despite not having hiked its gas tax since 1990, Illinois’ gas tax remains 10th-highest in the nation, according to the nonpartisan Tax Foundation.

In 2016, Illinois voters approved an amendment to the state constitution mandating revenue generated through motor fuel taxes only be used for transportation projects.

Pain at the pump

Illinois is one of just seven states that imposes a sales tax on gasoline. But that’s only one of the taxes hitting residents at the pump. For example, the typical Chicagoan’s gasoline bill includes the following taxes:

  • A federal motor fuel (excise) tax of 18.4 cents
  • State underground storage and environmental fees of a little over 1 cent
  • A slew of sales taxes that total 10.25 percent*:
    • 6.25 percent state sales tax
    • 1.25 percent Chicago sales tax
    • 1.75 percent Cook County sales tax
    • 1.00 percent Regional Transportation Authority sales tax
  • And more state and local motor fuel (excise) taxes:
    • 19 cent state motor fuel tax
    • 5 cent Chicago motor fuel tax
    • 6 cent Cook County motor fuel tax 

*How these taxes are layered on matters. Illinois sales taxes are first applied on the base cost of gas plus the federal tax and environmental fees. Then, state and local excise taxes are layered on after the sales taxes are applied.

It remains to be seen whether Emanuel’s push for a gas tax hike finds cooperation in the governor’s mansion come January, when Gov.-elect J.B. Pritzker will take over for outgoing Gov. Bruce Rauner. Taxpayers should keep in mind there’s also the possibility the General Assembly could pass a gas tax hike before Pritzker takes office.

High taxes are the No. 1 reason Illinoisans cite for wanting to leave the state. Rather than increasing the burden on overtaxed Illinoisans, state lawmakers should revisit the state’s unfunded mandates that increase costs on municipalities’ capital investments. Reforming Illinois’ outdated prevailing wage and workers’ compensation laws would go far in freeing up resources that could be allocated toward transportation and infrastructure.

When lawmakers return to Springfield in January, they must focus on reforms to make Illinois a state in which more people wish to plant roots. Increasing fuel taxes is bound to drive out more Illinoisans.

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