|
 Illinois drivers are scheduled to see their first automatic
annual gas tax increase on July 1, as the state’s share of tax on fuel purchases
will rise to 38.7 cents per gallon from 38 cents.
Last spring, state lawmakers approved a bill to double the state’s tax on
gasoline to 38 per gallon from 19 cents to help fund Gov. J.B. Pritzker’s $45
billion capital plan. It also included a provision to automatically raise the
tax every July 1 by the rate of inflation prior to March of that year, and not
to exceed 1 cent. This year, that means an increase of 0.7 cents, according to
the Illinois Department of Revenue.
Matt Schrimpf, owner of Piasa Motor Fuels near Alton, Illinois, says increasing
the state fuel tax puts Illinois’ gas stations at a severe disadvantage compared
to their peers just across state lines.
“It’s been quite devastating, and the reality is that it’s not going to get any
better because every year it’s going to get higher,” Schrimpf said.
 Schrimpf’s business has largely been unaffected by the tax increase because he
transports fuel from Illinois to Missouri, but the stores he delivers to in
Illinois have seen their demand decline because it’s easy for Metro East
residents to fill up on gas nearby in the St. Louis area.
Schrimpf said Illinois’ stay-at-home order and slow reopening also hinders
business. His business has seen a 70% decrease in the volume of gas sold in
Illinois during the past few months, while business in Missouri is back up and
running at 85% of normal operations.
“We’re still greatly handicapped on normal business. Just one little decision
continues to push more business off of our borders.”
Gas station owners have been especially hard hit during the past year. Pritzker
signed a gradual minimum wage increase last year that will see minimum wages
jump from $8.25 on Dec. 31, 2019, to $10 on July 1. Cigarette taxes were also
increased by $1.
[ to
top of second column] |
“We will have to see but there will be a lot of
bankruptcies, mostly in the gas business. Across all the towns near
the borders, there will be a lot of business closures,” said Sam
Dharni, who owns a Shell station in Antioch, just yards from the
Wisconsin border.
While this year’s increase may seem small, pennies
add up. If the gas tax rises at the same rate it did this year from
2021-2025, compound interest at the current inflation rate will take
the tax to 42.4 cents per gallon in 2025.
By doubling the gas tax last summer, lawmakers charged Illinois
drivers an extra $100 per year in gas. If the inflation projection
holds true, tack on another $23 per year in 2025. Gas taxes also
drag down businesses and drive consumers out of the state – all
while state leaders avoid responsibility for the gas tax increases
because they are “automatic.”
Former state Sen. Martin Sandoval was behind the gas tax. Sandoval
plead guilty to tax fraud and bribery in January after federal
investigators charged him with filing false tax returns and
accepting $250,000 in bribes from a red-light camera vendor. As the
chair of the Senate Transportation Committee, Sandoval was
instrumental in passing the gas tax through the General Assembly and
was a strong supporter of the progressive income tax amendment,
which is on the Nov. 3 ballot.
Illinois drivers in July will hand over more in gas taxes, then in
November will be asked to give lawmakers more authority to raise
income taxes. The progressive tax question asks voters to remove the
Illinois Constitution’s flat tax protection, opening the door to
taxes on retirement income, higher taxes on the middle class as well
as up to 47% higher taxes on more than 100,000 Illinois small
businesses that create 60% of the state’s jobs – just as those
businesses are trying to recover from the COVID-19 recession.
Click here to respond to the editor about this article
|
