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Labor, Business Groups Seek Gas Tax Increase

Labor, Business Groups Seek Gas Tax Increase

The people who build roads in Illinois are asking for a tax increase to pay for road building. The Transportation for Illinois Coalition, made up of business and labor groups, wants to set aside $1.8 billion a year for road and transit projects.

Some of that would come from designating the sales tax on gasoline specifically for this purpose. They’re also calling for an increase in the motor fuel tax of 4 cents a gallon – 7 cents for diesel fuel – and for a new tax.

“We would also propose for the first time ever an expansion of the sales tax base in the state of Illinois to include some auto-related services, such as car washes, auto repair and oil changes,” said Doug Whitley, head of the Illinois Chamber of Commerce and co-chairman of the Transportation for Illinois Coalition. The group also calls for ending the tax-free status of ethanol.

With respect to the fuel taxes, Whitley noted they had not been raised since 1990, since which time vehicles have become more fuel efficient or are using alternative fuels, so the need for roads is just as great, but revenue from the tax is declining.

Under the proposal, 80 percent of the money would go to roads, 20 percent to transit. Of the 80 percent that goes to roads, 60 percent of that would go to state roads, primarily non-tollway interstate highways, and 40 percent would be for local roads.

Whitley said this is his group’s proposal, and lawmakers should keep it in mind as they discuss tax changes this year. The proposal comes as the state’s current construction program, known as Illinois Jobs Now, is set to expire June 30. That five-year program provided $30 billion for capital projects, including $12 billion for transportation. However, it relies on bonds to be paid off later; Whitley characterized his proposal as pay-as-you-go.

The federal transportation program, MAP 21, is due to expire Sept. 30.

 

 

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