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*** UPDATED x1 *** Pritzker’s preliminary draft capital plan relies on about $1.8 billion a year in new or higher taxes
Friday, May 17, 2019 - Posted by Rich Miller *** UPDATE *** Click here for the full briefing. * The governor’s preliminary draft of the capital plan pitched to lawmakers today includes numerous proposed tax and fee increases and some brand new taxes. Some of these ideas are more likely than others to pass. The packet distributed to members today claims the proposal will include a “combination of bonding and consistent, annual pay-as-you-go funding.” …Adding… Total bonding over six years will be $17.807 billion. Total pay as you go will be $7.035 billion over six years. Total federal money is banked at $10.032 billion. Local/private share is listed as $6.642 billion for a grand total of $41.515 billion over six years. A proposed motor fuel tax increase of 19 cents per gallon for gas and diesel, double what it is now. The increase is lower than both the Local 150 plan and the Illinois Chamber plan (both were 25 cents). $560 million a year. The current $101 a year vehicle registration fee would go to $199 for vehicles 3 years old or newer, $169 for vehicles 4-6 years of age, $139 for vehicles aged 7-11 years, and $109 for vehicles 12 years and older. Kind of a progressive tax without using auto values. $490 million a year. The registration fee for electric vehicles is now $34 per vehicle and would rise to $250 per year. $4 million a year. The Real Estate Transfer Tax (for non-residential transactions) would rise from 50 cents per $500 in market value to $1. The fee hasn’t been changed since 1989. $34 million a year. Current liquor gallonage taxes are 23.1 cents on beer and cider, $1.39 on wine, and $8.55 on distilled liquor. The new proposal would increase the rate per gallon by 4.6 cents, 66 cents, and $4.05, respectively. $120 million a year. Currently, traded-in property provides a sales tax exemption on the purchase of property up to the value of the property traded-in. This proposal would introduce a $10,000 cap per trade-in transaction. $60 million a year. The video gaming terminal tax is currently 30 percent of net. According to the draft: “The structure for this proposal is to be determined, but a portion of the revenues from the current discussions to restructure this industry can be allocated to the capital budget, on top of operating budget needs.” $90 million a year. A new state tax on ridesharing of $1 per ride. $214 million a year. A new 7 percent tax on cable, satellite and streaming services (an almost perennial proposal that has never passed). $150 million a year. A new parking garage tax of 6 percent tax on daily and hourly garage parking and a 9 percent tax on monthly and annual garage parking. $60 million a year. Total: $1.782 billion a year. Your thoughts? …Adding… Many of these ideas were not generated by Pritzker or his staff, but came from the working groups, some of which were bipartisan. * Related…
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- wordslinger - Friday, May 17, 19 @ 12:54 pm:
–A proposed motor fuel tax increase of 19 cents per gallon for gas and diesel, double what it is now. The increase is lower than both the Local 150 plan and the Illinois Chamber plan (both were 25 cents). $560 million a year.–
Provides some cover for the predictable, soon-to-come howling from the Usual Suspects who will never make a tough vote, but will be first in line at the trough.
- Uncle Merkin - Friday, May 17, 19 @ 12:57 pm:
Increasing gas tax without indexing it is a missed opportunity to avoid these kind of politically costly plans in the future
- DarkDante - Friday, May 17, 19 @ 1:00 pm:
Seems to me that the state is utilizing several of the revenue source that Mayor-Elect Lightfoot has talked about using, creating a bit of a double-dipping hazard. 2 examples: the increased rideshare fee, and the real estate transfers tax (also extending sales tax to streaming was something Rahm had already done). I’d personally prefer to see the state budget based on the gas tax and registration fees rather than see them try to tap into the real estate transfer tax and/or rideshare fees.
- Central Illinois Center Right - Friday, May 17, 19 @ 1:00 pm:
Some good, some bad - as it should be with revenue generators.
While many will be politically heavy, I view the streaming tax as what upsets the masses most
- ilcommenter - Friday, May 17, 19 @ 1:06 pm:
EV registration at $250? Great way to disincentivize people from buying EVs. Has Pritzker moved on reinstating state credits for EV owners?
- DuPage Saint - Friday, May 17, 19 @ 1:06 pm:
Looks fine by me. We got to have money and this seems ok. Surprised Alcohol not taxed more.
I wish everyone would pull together and get this done and done quickly.
- Thomas Paine - Friday, May 17, 19 @ 1:08 pm:
Double the Uber tax, eliminate the alcohol tax hike and the trade-in cap.
Alcohol sales have nothing to do with capital needs, and taxing trade-in value is effectively double-taxation.
- Ole' Nelson - Friday, May 17, 19 @ 1:12 pm:
Overall, I say a pretty solid start. I predict much wailing and gnashing of these by those that believe government services, including roads, prisons, and employee pensions should come from pixie dust and without tax revenues.
- Nick - Friday, May 17, 19 @ 1:14 pm:
Does this not include also indexing the gas tax to inflation, then?
- City Zen - Friday, May 17, 19 @ 1:16 pm:
==EV registration at $250? Great way to disincentivize people from buying EVs.==
That won’t happen.
We’re now #8 for taxes on distilled liquor. And beer tax would be 27.7 cents, but thank goodness it’s not 28 cents.
- 47th Ward - Friday, May 17, 19 @ 1:17 pm:
===The increase is lower than both the Local 150 plan and the Illinois Chamber plan (both were 25 cents)===
I’d expect that number to go up to 25 cents after it becomes clear that the TV tax isn’t going to pass (again).
Also, the new parking garage tax on top of what Cook and Chicago are charging. That should boost the collection from the Uber tax.
Overall, it’s a pretty good mix. I’d love to know which taxes some of the Republicans on the working group proposed so when they get around to voting against those, I’ll know who the real courageous ones are.
Everybody wants to go to Heaven, but nobody wants to die.
- City Zen - Friday, May 17, 19 @ 1:17 pm:
==Does this not include also indexing the gas tax to inflation, then?==
Just like the proposed graduated income tax brackets.
- anon - Friday, May 17, 19 @ 1:18 pm:
Motor fuel and cable/streaming will be the only increases that could generate public reaction.
- DD - Friday, May 17, 19 @ 1:19 pm:
— . The fee hasn’t been changed since 1989 — irrelevant, as property values increase, so should revenue.
- Nick - Friday, May 17, 19 @ 1:20 pm:
Also $250 for EVs seems like a good compromise I think, doesn’t it? Especially versus that idiotic plan to have them pay $1000. Wasn’t it said that like the max equivalent in gas taxes someone might pay would only be in the range of like a couple hundred.
- Evanston - Friday, May 17, 19 @ 1:20 pm:
Cable is already taxed too much. The Rate for Internet, TV, and a land line is now 175.00 after 75.00 in taxes and fees.
It is as low as I can get it and don’t have any extras or premium channels. It is getting time to quit cable at this point and then they all lose because enough is enough
- Anon - Friday, May 17, 19 @ 1:22 pm:
Since the Chicago Mayor-elect ran on a proposal to raise the city’s Real Estate Transfer Tax, the doubling of the state portion would create a double-hit.
- Evanston - Friday, May 17, 19 @ 1:24 pm:
Cable taxes are already almost 50% when you consider all of them
- Just another Anon - Friday, May 17, 19 @ 1:28 pm:
@Uncle Merkin
>Increasing gas tax without indexing it is a missed opportunity to avoid these kind of politically costly plans in the future.
Agreed. Index the sucker to CPI and call it a day. No more can kicking since this all goes into the “lockbox” now.
- Moody's Blues - Friday, May 17, 19 @ 1:28 pm:
Three quick questions:
1) For all the focus here on taxes, who pays off the bonds? $1.8B per yr covers the pay/go but doesn’t leave much for debt service.
2) Have bonds been paid off for all prior capital programs?
3) We keep adding buildings to underutilized universities. Isn’t this a great opportunity to streamline and reshape the university system into more specialized campuses?
- Been There - Friday, May 17, 19 @ 1:37 pm:
With the discussions on a gaming bill in the works I always thought they would use those proceeds for capital. If that does keep moving they must plan on using it in the budget. Or maybe a backup if Cannabis doesn’t get over the finish line.
- My button is broke... - Friday, May 17, 19 @ 1:43 pm:
I’m guessing if a group that wants to shoot the whole thing down (like the last capital bill), they may argue that the graduated fee structure for vehicle registration is a tax on personal property and not a fee. And personal property taxes are prohibited by the constitution.
Glad to see doubling the drivers license fee is not included. $60 seemed steep.
- Earnest - Friday, May 17, 19 @ 1:47 pm:
As always, I celebrate any of our elected officials willing to propose specific spending cuts or revenue increases. I appreciate the fact here that everything doesn’t hang on one specific tax or fee.
- Just Sayin' - Friday, May 17, 19 @ 1:56 pm:
Averages to be about $141 increase per resident per year.
- CPA - Friday, May 17, 19 @ 1:56 pm:
This is why I won’t support the Progressive Tax Proposal.
They will just raise taxes in other ways.
My $50 I save being in the 97% will just go to regressive taxes. I will need a lot more than $50 in tax relief.
- Blue Dog Dem - Friday, May 17, 19 @ 1:58 pm:
I must have missed in the fine print that Labor was freezing costs for seven years.
- Rich Miller - Friday, May 17, 19 @ 2:01 pm:
===My $50 I save being in the 97% will just go to regressive taxes.===
Your logic is so messed up. If the graduated tax goes down, I can pretty much guarantee that not only will you not get a tiny income tax cut, but you and everybody else will get a rather large tax hike.
I mean, seriously, for a CPA you have an odd way of doing addition.
- JB13 - Friday, May 17, 19 @ 2:04 pm:
If you can make someone pay more to register a new vehicle vs an older model, you surely can find a way to make someone who owns a $200,000 2020 Tesla pay more to register their EV than someone who owns a $30,000 Nissan Leaf.
- PublicServant - Friday, May 17, 19 @ 2:10 pm:
===I mean, seriously, for a CPA you have an odd way of doing addition.===
Ideologue first…CPA a distant second.
- Uncle Merkin - Friday, May 17, 19 @ 2:16 pm:
Let’s not get too carried away with the EV owners needing to pay less. The cars cost more in many cases, but they don’t buy the 800 gallons of fuel that an average motorist does, don’t pay sales tax on the fuel, pay no fuel tax, pay a $17.50 registration fee, and they got various credits when they bought the car. Enough is enough. Pay your share.
- cleanairguy - Friday, May 17, 19 @ 2:28 pm:
If the governor provides cap funds to build transportation electrification infrastructure in low income communities (sorely needed to provide infrastructure the market won’t and which you need to get those clean cars in those communities), why wouldn’t they index electric car registration by age like they are doing with gas-powered cars? People in low income communities - heck, people in middle income communities - would be more likely to buy much more affordable older and used. Why charge people, maybe buying a 5 year old electric car for $8,000, the same as someone buying a brand new luxury $80,000 electric car? Doesn’t really make sense, seem fair, or encourage the public good you are actually planning to build with capital dollars….
- Soccermom - Friday, May 17, 19 @ 2:39 pm:
I wish people would understand that investing in infrastructure saves us money. How much does it cost to replace a tire when you slam into a pothole?
- Soccermom - Friday, May 17, 19 @ 2:39 pm:
And how much would you pay to make sure that your kids are safe when their schoolbus crosses a bridge?
- Soccermom - Friday, May 17, 19 @ 2:42 pm:
Seriously — how much more would you be willing to pay for a gallon of gas to keep this from happening to your son or daughter? https://kstp.com/news/i-35w-bridge-school-bus-survivors-recall-the-collapse/4560746/
- City Zen - Friday, May 17, 19 @ 2:46 pm:
==This is why I won’t support the Progressive Tax Proposal.==
There are much better reasons not to support it.
==I must have missed in the fine print that Labor was freezing costs for seven years.==
Forget the cost freeze. I’d prefer performance metrics. We should be able to lay more pavement of higher quality each and every year.
- Rich Miller - Friday, May 17, 19 @ 2:55 pm:
To the people who keep coming on here and complaining about there being no budget cuts. This is not the budget, this is a capital spending plan.
- Lester Holt’s Mustache - Friday, May 17, 19 @ 2:59 pm:
Also, nothing for big trucks? At least throw in a larger registration fee increase or something. If they’re doing it for EV’s, they should do it for semi’s too. I don’t understand why you don’t focus the largest portion of the funding for repairs on the largest cause of the damage
- Lester Holt’s Mustache - Friday, May 17, 19 @ 3:07 pm:
==We should be able to lay more pavement of higher quality each and every year==
Hopefully they’ll use RAC with the porous elastic for roadwork, but I won’t hold my breath. We are talking about IDOT, after all
- wordslinger - Friday, May 17, 19 @ 3:12 pm:
–I must have missed in the fine print that Labor was freezing costs for seven years.–
–To the people who keep coming on here and complaining about there being no budget cuts. This is not the budget, this is a capital spending plan.–
Mindless trolling.
- ajjacksson - Friday, May 17, 19 @ 3:19 pm:
For the people that keep coming on here and complaining about budget cuts, or lack thereof: you had your guy for four years. He couldn’t find anything to cut, evidently.
And I’m with soccermom. Are you all just going to avoid travelling on I-80 near Joliet?
- RNUG - Friday, May 17, 19 @ 3:29 pm:
I guess, for once, I’m glad I mostly own 20 and 35 year old vehicles.
I’m not that surprised at the graduated plate rates; a number of states already do that one way or another.
Looking at the laundry list of taxes, the one most likely to aggravate people will be the cable, satellite and streaming services tax. I expect it will be the first to fall by the wayside.
- anon2 - Friday, May 17, 19 @ 3:36 pm:
There was lots of enthusiasm here for doubling the state cigarette tax. I predict less enthusiasm for much smaller percentage increases in alcohol taxes.
- Lt Guv - Friday, May 17, 19 @ 3:36 pm:
==Hopefully they’ll use RAC with the porous elastic for roadwork, but I won’t hold my breath. We are talking about IDOT, after all==
Can we dare to dream?
- Big Jer - Friday, May 17, 19 @ 3:40 pm:
==Also, nothing for big trucks?===
Good catch Lester. In the big trucks category I would include large SUV’s, Semi’s, and Large Pick Up Trucks.
I have mentioned in a previous comment one thing that seems overlooked in the wear and tear on infrastructure is how many more semis, large SUV’s, and Large Pick Up Trucks there are than say 20 -30 years ago.
Back in the 60’s many pick up trucks had tires that were no much bigger than passenger car tires. And pick up trucks were smaller than they are today.
Also many pickup trucks have large off-road tires which probably do more wear and tear on roads. Lastly many large SUV’s such as the Chevy Suburban are just large pick up trucks with a cap on the back.
You want to own a big truck then you should have to pay more for the damage your vehicle will do to the roads and bridges.
Echoing Lester’s comment due to much larger economy and larger population than back in the day, there are a lot more semi trucks than ever.
Seems like most of the new taxes are directed to the working classes and not to corporations, multinationals , etc. who benefit from infrastructure but do not want to pay for it.
Today’s capitalism: Privatize the gains, socialize the losses/externalities.
- SAP - Friday, May 17, 19 @ 3:47 pm:
==EV registration at $250? Great way to disincentivize people from buying EVs.== The plan has larger disincentives for purchasing internal combustion vehicles. With the corresponding motor fuel tax increase, the additional tax on 265 gallons of gas would be the same amount as the difference between the registration fee on an electric vehicle vs. an internal combustion vehicle. Hardly see the registration fee as a dealbreaker.
- Chicago Bars - Friday, May 17, 19 @ 4:57 pm:
Anybody know how much of the gas tax is generated by commercial trucks?
- Chicago Bars - Friday, May 17, 19 @ 5:04 pm:
Preliminary number crunching but for Chicago drinkers specifically the proposed alcohol tax hikes would for Illinois consumers would be:
Spirits tax - $12.80/gallon (tied for 3rd highest with Alaska)
Wine tax - $2.05/gallon (fifth highest in nation)
Beer tax - $0.28/gallon (after rounding - 18th highest in nation, currently 25th)
For Chicago residents after this proposed hike and the current triple layer cake of State, County, and City sin taxes:
Spirits - $17.78 per gallon (higher than any of the 50 states)
Wine - $2.65 per gallon (higher than any of the 50 states)
Beer - $0.66 per gallon (7th highest versus the 50 states)
In a sector where tax collections have been nearly flat since the last state tax hike in Pat Quinn’s infrastructure bill. Ouch. Ouch. Ouch.
- JT11505 - Friday, May 17, 19 @ 5:14 pm:
“…Great way to disincentivize people from buying EVs”
Well, Illinois’ ag sector does rely on ethanol production, so maybe that’s a feature, not a bug.