Will Springfield Address Gas Taxes?
A gas station on Addison St. in Chicago last Thursday. (Photo: Chicago Sun-Times)
Gas prices have spiked across Illinois, ranging from around $4.75 per gallon in southern Illinois to over $5.30 per gallon for regular unleaded in parts of the city of Chicago and suburbs.
There’s little state lawmakers can do to address the inflated wholesale prices, mostly caused by the conflict in Iran. But the state does impose a 48.3¢ per gallon tax on every gallon of gasoline (in addition to the 18.4¢ per gallon federal tax) and a 5% sales tax on top of it all.
Republicans are calling for relief from the tax burden while Democrats are weighing budget implications of reducing or eliminating either tax, even temporarily.
The nearly 50¢ per gallon gasoline tax is dedicated to the state’s road fund. It was 19¢ per gallon until it was doubled with passage of Gov. JB Pritzker’s capital program in 2019. Lawmakers added an automatic inflation adjustment into the bill, leading to automatic increases each year.
The gasoline sales tax was previously split between the road fund and the state’s General Revenue Fund, but the mass transit package passed by the General Assembly last year shifts the sales tax fully to funding Chicago-area and downstate mass transit systems.
Republicans are calling for a sales tax holiday.
“After JB Pritzker and Democrats raided downstate road funds for transit, downstate taxpayers deserve relief,” said Rep. Ryan Spain (R-Peoria). “I filed HB 5738 to provide sales tax relief in way of a six-month temporary gas sales tax holiday from July 1, 2026, to December 31, 2026. This sales tax holiday is the right thing to do for both consumers and the state’s economy.”
When asked about reducing either tax to provide relief for consumers during the price spike, Democrats instead attacked President Donald Trump over the Iran conflict.
“President Trump’s reckless decisions are destabilizing global oil markets and driving up prices at the pump for American families. It’s deeply telling that Illinois Republicans would rather point fingers than get President Trump to change course and bring stability that would actually lower prices,” said a spokesman for Gov. JB Pritzker. “As Trump and Republicans take away health care and food assistance for working families, Gov. Pritzker is focused on lowering costs and always evaluating responsible ways to provide relief for Illinoisans, but real relief starts with ending the war in Iran.”
Democrats did pause the inflation adjustment in the gas tax prior to the 2022 general election, a move that was criticized by opponents as an “election year stunt.”
At a news conference last week, Pritzker was asked about repeating the move this year.
“Well, I don’t disagree that is, in fact, what we have done in the face of inflation. That’s our reaction was, let’s temporarily suspend the grocery tax. Let’s temporarily suspend the gas tax, et cetera, at least the increase in the gas tax. And we also provided other measures of cost reduction to people. I think it was almost $2 billion of relief that we provided. We’re looking for all of those ways to deal with increasing cost of things even now, very important to me, though, that we make sure and balance all of the broader inflation questions and the question of whether or not we’re going to continue to build the roads and the bridges and the airports and the river ports that are funded by the motor fuel assessment,” he said. “So I really believe that it’s worthy of contemplation, but that is not something that you know we have front and center here. We’ve got a whole bunch of issues, including reducing the cost of housing in the state, and that’s been something that we’re trying to usher through the legislature right now.”
John Patterson, a spokesman for Senate President Don Harmon, called gas tax discussions ongoing.
“The real solution to staggeringly high gas prices comes from stable federal international policies and strong domestic energy policies,” Patterson said. “As for what might be done here in Illinois to help motorists, that’s an ongoing topic of discussion.”
A spokesperson for House Speaker Chris Welch did not respond to a request for comment. Multiple House Democrats told The Illinoize Monday the gas tax issue has not been presented to members in caucus meetings.
Some lawmakers, both Republican and Democrat, said prior to shifting the gasoline sales tax from the GRF to transit, a temporary pause in the sales tax would be considered by some a “slam dunk.”
But Spain said Democrats have painted themselves into a corner with recent gas tax changes.
“Downstate has seen systemic disinvestment in our road and bridge infrastructure over the past several decades, but this taking escalated in a significant way when Democrats raided downstate road funds by seizing sales taxes on motor fuel and all market interest gained on unspent road funds to bail out mismanaged Chicago-area mass transit systems,” he said.
The Department of Revenue reports the inflation adjustment on the gas tax will increase the rate from from 49.6¢ to 66.6¢ per gallon on July 1.
UPDATE: I goofed on the gas tax adjustment on July 1. I said it would go up to 66.6¢ in July, but that’s the Motor Fuel Use Tax for commercial users. It’s going up from 48.3¢ to 49.6¢. I apologize for the error.
