It's Time for Gas Tax Relief
A gas station in suburban Mundelein Monday. (Photo: Daily Herald)
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OPINION
There are few times in politics when the legislature has an easy answer to a complicated question. Providing temporary relief for consumers paying outrageous gas prices presents Governor JB Pritzker and the Democratic majority in the legislature one of those easy answers.
We can all stipulate for the reason for high gas prices in every corner of the country are at near-record highs. The war in Iran has destabilized the market and much of the oil shipped to the U.S. from places like Saudi Arabia is being shipped to Asia through the Red Sea instead of to the United States through the still-closed Strait of Hormuz.
No matter your position on the war, why this is happening is clear.
What’s also clear is Governor Pritzker and the General Assembly can do something today to significantly ease the burden for consumers.
The state charges a 48.3¢ per gallon “Motor Fuel Tax,” which is often just referred to as the “gas tax.” The federal government tacks on another $18.4¢ per gallon. The state gas tax funds the road fund while the federal tax feeds the Highway Trust Fund. The feds are making moves to reduce that tax, by the way.
The state also double-taxes gasoline, adding a 6.25% sales tax on the price of gas, because, apparently, one tax isn’t enough on a product everyone uses.
There have been calls from some House Republicans to temporarily repeal the state’s sales tax on gasoline, but that’s not the focus of this column. 5% of the current sales tax goes to the road fund and the other 1.25% goes to the General Revenue Fund, the state’s checking account. But, on July 1, the sales tax begins funding mass transit. That change was made by the mass transit bailout bill enacted last year, and with all of the political capital Democrats used to get that bill across the finish line, they aren’t changing transit funding sources for anything right now. So, let’s move past that for now.
The state should reduce or temporarily eliminate the nearly 50¢ per gallon gasoline tax immediately. This is the fastest way to reduce the burden consumers are paying for gasoline and put real money back into their pockets.
Many city or suburban folks may not realize just how much gasoline people downstate are forced to burn through just to get to work or run daily errands. Where I grew up, the nearest gas station was 7 miles away and the nearest grocery store was 15 miles away. Many folks would drive 30 miles one way to Kankakee, 50 miles one way to Champaign, or 60 miles one way to Bloomington-Normal just to get to work. When gasoline pushes $4.50 or more per gallon, that adds up in a hurry.
The argument against reducing the gas tax, even temporarily, will be reducing deposits into the state road fund, which pays for road and bridge repairs around the state. We need that fund, we need a gas tax long term to pay into that fund. But since Governor Pritzker’s capital bill was enacted in 2019, doubling the gas tax, the road fund has been flush with cash. Like, Pritzker couch cushions flush with cash.
As of the latest report from the Illinois Department of Transportation earlier this month, the road fund is currently sitting at $4.2 billion and the construction fund (the lockbox) is sitting at $2.9 billion. That’s $7.1 billion for roads that IDOT can’t spend fast enough even with all of the capital bill projects in the pipeline.
The last estimate I could find reported Illinois drivers pumped about 11 million gallons of gas a day. That’s roughly $5.4 million in gas tax daily, and $162.3 million each month. To suspend that gas tax through the end of the fiscal year (and hopefully gas prices start to come down by July 1), we’re talking a nearly $300 million hit to a $7 billion fund. It may slow a few projects in the pipeline, but would not put the road fund in any sort of dire straits in the near or long term.
Sadly, Governor Pritzker and Democrats don’t even appear to be interested in making the pro-taxpayer, pro-consumer decision that the Democratic Governor of Kentucky or the Republican Governor of Indiana already have. It’s easier for them to politically hang this around the necks of Republicans and try to boost their own legislative candidates or Pritzker’s presidential aspirations than to help consumers.
When gas prices spiked in 2022 due to inflation during the Biden administration and the Russian invasion of Ukraine, Democrats stumbled over themselves to freeze the automatic increase in the gas tax on July 1 (which they campaigned on like they had actually eliminated the gas tax). Now, when the politics help them, they’re slow rolling. That’s not how this is supposed to work.
Reducing the price of gas from $5 to $4.50 doesn’t take the pain away for consumers, but it is an easy, common sense way to contribute to the affordability they all told us was their top priority this year.
Get to work.
