Illinois drivers will see increased gasoline taxes next month, with another increase six months after that.
Motor fuel prices in Illinois are down nearly 70 cents a gallon since this time last month. However, the state is set to increase the fuel tax Jan. 1 by 3.1 cents, for a total of 42.3 cents per gallon. Another coming increase will occur in the summer on July 1.
In Gov. J.B. Pritzker’s first year as governor, he doubled the per-gallon tax from 19 cents to 38 cents with annual increases every summer tied to inflation. Since then, the state has seen some of the highest fuel prices in the nation due to inflation and other factors.
Josh Sharp of the Illinois Fuel and Retail Association said the scheduled increases will hurt drivers in a state with already high taxes.
“Gas taxes in Illinois are the second highest in the nation. We trail only California for the amount of tax we put on a gallon of fuel,” Sharp said. “We not only have a motor fuel tax, but we also have a sales tax in the state of Illinois.”
As of Monday, Illinois fuel prices sit at $3.45 per gallon, which is 20 cents higher than the national average of $3.26 per gallon. Sharp said even more tax increases would harm Illinois fuel stations that border neighboring states.
“When it comes to gasoline sales in those borders states, it’s very difficult,” Sharp told The Center Square. “It is very difficult when you have states like Missouri, which recently raised their gas tax, but it is still well below what Illinois’ is today.”
In the spring, legislators approved a budget that included various tax rebates and freezes. The grocery tax was suspended for a 12 months. The gas tax increase set for July 1, 2022, was delayed to Jan. 1, 2023. Pritzker and Democrats said the move was an effort to bring tax relief to Illinois families.
Sharp said relief would not be the word he would have chosen to describe the freeze.
“If it was permanent, I think you could call it relief,” Sharp said. “The fact you only did it for six months, and oh, by the way, it was during an election, that was not what I would call relief.”
Sharp said Illinois’ transportation infrastructure is driven by the taxes drivers pay at pump.
“The state of Illinois is collecting $2.5 billion alone on the motor fuel tax portion, and I think another $850 million on the sales tax portion,” Sharp said. “You have one industry really contributing $3.5 billion a year to the state of Illinois, and I think the state really needs to question is that too much?”
Also beginning Jan. 1, gas stations no loner have to display a state-required sign announcing the gas tax increase delay. Gas stations that didn’t display the sign the past five months could have faced a $500 a day fine. However, earlier this year, a spokesperson for the Illinois Department of Revenue said the “goal is not to issue fines, but rather encourage compliance and also ensure that consumers are informed about the tax relief to ensure they are paying no more than they should.”
***Courtesy of the Illinois Radio Network***