Guest Column: Removing sales tax on motor fuel

Even though we are still in the first half of 2007, it has already been a record-breaking year for Illinois families—utility costs threaten to double as summer approaches, the largest tax increase in state history is being pushed by the governor, and gasoline prices have crept well past $3 per gallon—and it’s only May.

As Illinois families continue to do more with less—isn’t it time that the state does the same? Recently, a plan to eliminate the state sales tax on gasoline is being attacked by opponents who seem more interested in spending a tax windfall than in protecting consumers.

Our proposal would permanently cut 5 percent of the 6.25 percent sales tax on gasoline, reducing the tax to 1.25 percent. The motor fuel tax portion, which is allocated to local governments for road construction and improvements, is not affected by this proposal. This would reduce the price of a gallon of gasoline by 16 to 20 cents a gallon. Not only does this help Illinois families, but it also will encourage other motorists to fill up in Illinois; thus, we sell more gasoline. Currently, Illinois gas prices are 25 to 28 cents higher per gallon than our neighbors. When consumers avoid purchasing gasoline in Illinois, not only does the state lose tax revenues, but we also lose matching federal funds, which are based on the state’s total gasoline sales, but we also lose tax revenues from sales inside of gas stations. By repealing the state sales tax on gasoline, we actually increase state revenue, thus offsetting the revenue reduction from repealing the sales tax.

The temporary sales tax suspension in 2000 did reduce state gasoline tax revenues by $157 million, but it allowed the state to garner additional federal dollars and sales tax revenue from inside sales. The 2000 temporary gasoline sales tax suspension also granted Illinois families much-needed relief—today, Illinois families need this same relief if Illinois will ever be able to grow itself out of its current budget deficit.

Sen. Brad Burzynski represents the 35th district, and Sen. Dave Syverson represents the 34th district. Both are Republicans.

from the July 11-17, 2007, issue

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