MOLINE, Ill. — As part of Illinois Governor J.B. Pritzker's newest budget proposal, he wants to offer families $1 billion in tax relief. Part of that would come from a temporary freeze on the state's motor fuel tax.
But critics on both sides of the debate say his plan for the gas tax doesn't do enough for Illinois families.
In early February, Pritzker announced a key portion of his budget proposal: the Illinois Family Relief Plan. This plan would offer state-wide, short-term tax cuts on issues directly impacted by inflation.
One key component of that plan is a one-year freeze on Illinois' annual gasoline tax increase.
Since 2019, the Rebuild Illinois capital construction plan has been bolstered by the yearly raise. The $45 billion fund helps pay for bridge and road repair throughout the state, after standing at 19 cents per gallon for nearly three decades, lawmakers voted to double it to 38 cents, then tie it to inflation.
Pritzker wants to freeze that yearly increase (for just one year), which is set to raise by 2 cents this summer, from 39.2 cents to 41.4 cents per gallon.
For the average motorist, that freeze would save roughly 35 cents during every trip to the pump. But for the state, it would mean losing out on $135 million in tax revenue.
"I can tell you that $135 million is a lot when it comes to modernizing our bridges in the state of Illinois," said Ed Maher, communications director for Local 150, the International Union of Operating Engineers. "And when you've got over 2,000 bridges that you've got to catch up on, you know, we need every dollar that we can get to perform this important work."
The men and women of Local 150 directly see the impact of ignored infrastructure projects, said Maher. As heavy equipment operators, construction workers, road builders and more, he says the union has been 'screaming' for more financial help for decades. Connecting the motor tax aspect of Rebuild Illinois with inflation, says Maher, was a step in the right direction. Now, he's worried the state is going to slide backward again.
"We've only been playing catch up on bridges for about two years now," said Maher. "This would just mean that there's $135 million that's unavailable this year. And it would take out of the total budget that plans for things like engineering, so it could impact projects that are coming down the road as well."
However, the governor isn't worried. During a press conference on Feb. 7, Pritzker said the state already has enough money this year.
"We have the means to press ahead with all of the projects that the motor fuel tax funds normally would allow us to, without the need for any increase this year," he said. "So this year we are holding the line and offering a reprieve for rising prices for Illinois families. It will bring immediate relief to everyone at the gas pump without delaying a single infrastructure project."
And he's got another reason to feel optimistic. President Joe Biden's Infrastructure Investment and Jobs Act are on track to give $3.8 billion to Illinois over the next five years.
But Maher says that's still not enough to address all of the state's problems.
"It's not the time to just pause and say, 'well, we've got federal money coming in,' because we need every dollar of that federal money as well, just to continue making progress on this," he said. "The state money is important and the federal money is important. But even with both of those things, we're still not going to be spending enough as a state to correct all these problems over the next 10 years."
And there's still another side to this debate. Some advocates are saying the problem with the governor's proposal is that it would only go into effect for one year, as opposed to offering long-term relief.
"We're hoping for a more permanent solution," said Josh Sharp, CEO of the Illinois Fuel & Retail Association. "Unfortunately, I think it would really come with a sticker shock in two years when we ultimately have to readjust that price for inflation."
Sharp also points out that Illinois already has some of the highest gasoline taxes in the country, and is one of only a few states that allow compounding taxes on fuel.
"Illinois taxes gasoline on multiple levels: state, local, counties even get in on the action. I think there's room for the state to do something there as opposed to this temporary relief that might be one or two cents per gallon," said Sharp.
He'd like to see state lawmakers get rid of some of that burden, especially the sales tax on top of a motor fuel tax. In fact, only six other states and Puerto Rico subject motor fuels to some or all of their general sales tax.
"That's an enormous amount compared to other states and certainly compared to our neighbors," said Sharp. "I think that's ultimately where relief lies. Not a simple, you know, one-time fix."
Illinois lawmakers have until the end of May to approve the governor's budget proposal, but that decision could come as early as April.