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It sounds like a good idea until you apply some logic

Thursday, Jul 11, 2019 - Posted by Rich Miller

* GateHouse Media

Illinois legislators in June voted to double a state tax on gasoline to 38 cents from 19 cents per gallon. The increase took effect July 1, and gas station owner Pravin Patel immediately noticed a dip in sales.

Patel operates a Mobil gas station in South Beloit, located about the length of football field away from the Illinois-Wisconsin border. He said he’s making about $2,000 less per day on gas sales than in previous months, based on credit card transactions alone. He’s heard similar stories from other gas station owners near the border, he added.

“I’ve lost a lot of business and I’ve lost two employees because I can’t afford them anymore” Patel said. “Because the tax went up, business went down.”

Patel suggested that legislators should consider a buffer zone of sorts to protect gas station owners on the border. If the additional tax was waived within a mile or two of the border, customers might return to Illinois, he said.

A buffer zone sounds interesting, but what do you do about the gas stations just outside the buffer zone? Create another buffer zone? And then what do you do about those gas stations outside the second buffer zone?

* Look, there will be some pain with this gas tax increase. No doubt. But we can’t create a time machine to go back and fix this state’s infrastructure problems. The fixes can only be done in the here and now and in the future. And the problems were ignored and/or neglected for so long that a bigtime solution was necessary.

The problems some gas stations, corporate or otherwise, are having shouldn’t take precedence over fixing what we’ve collectively broken. The best thing to do is to try not to get so far behind ever again.

…Adding… From comments

The location of a business is a well known valuation factor. The potential for tax hikes or tax cuts impacting a business will be taken into account for evaluating the value of an “on the border” business and, in theory, also for the business’ property tax assessments. Unfortunately, “risk” is also a well known business factor.

       

50 Comments
  1. - Blue Dog Dem - Thursday, Jul 11, 19 @ 3:00 pm:

    My middle son who lives in Columbia tells me gas is 63cents/gallon cheaper 3 miles over the bridge.


  2. - Practical Politics - Thursday, Jul 11, 19 @ 3:01 pm:

    Traveling through Western Illinois during the last week, I found that some stations were still about fifty cents lower per gallon than Cook County.

    I know that the gas tax increase was sold as being necessary to repair our crumbling roads and bridges, but I am curious as to how many dollars were diverted from the fuel taxes (meant for road repairs) before the voters approved a referendum restricting the use of those dollars?


  3. - Samuel Culper - Thursday, Jul 11, 19 @ 3:04 pm:

    The location of a business is a well known valuation factor. The potential for tax hikes or tax cuts impacting a business will be taken into account for evaluating the value of an “on the border” business and, in theory, also for the business’ property tax assessments. Unfortunately, “risk” is also a well known business factor.


  4. - AuH20 - Thursday, Jul 11, 19 @ 3:07 pm:

    @ Blue Dog Dem - That can’t all be tax, though. Gas tax is 38 cents, price difference is 63.

    And cheaper gas won’t be much help without safe roads to drive on.


  5. - Grandson of Man - Thursday, Jul 11, 19 @ 3:07 pm:

    The people who refuse to pay the gas tax should refuse to drive on the upgraded infrastructure. To many of them takers are other people.


  6. - Yellow brick road - Thursday, Jul 11, 19 @ 3:08 pm:

    Far more of the new capital budget should have been devoted to maintenance. Too many brand new projects.


  7. - btowntruth from forgottonia - Thursday, Jul 11, 19 @ 3:09 pm:

    “Look, there will be some pain with this gas tax increase. No doubt. But we can’t create a time machine to go back and fix this state’s infrastructure problems. The fixes can only be done in the here and now and in the future. And the problems were ignored and/or neglected for so long that a bigtime solution was necessary.

    The problems some gas stations, corporate or otherwise, are having shouldn’t take precedence over fixing what we’ve collectively broken. The best thing to do is to try not to get so far behind ever again.”

    That is how a grown up speaks.
    Wordslinger must be smiling right about now.


  8. - Nieva - Thursday, Jul 11, 19 @ 3:12 pm:

    Diesel at 50 cents per gallon cheaper 4 miles across that money saving bridge at Shawneetown. It is killing the quck mart in Shawneetown. His fuel business has fell over 50%. If he goes under the county will be down to 3 places to buy fuel not to mention milk and bread. We drive 20 miles now for groceries.


  9. - ike - Thursday, Jul 11, 19 @ 3:13 pm:

    Lets get rid of the gas tax and reinstitute the soda tax. Then, when everyone gets upset about that again, get rid of the soda tax and reinstitute the gas tax /s


  10. - Econguy - Thursday, Jul 11, 19 @ 3:15 pm:

    Why don’t we just let em put in a couple extra slot machines?


  11. - Not a Billionaire - Thursday, Jul 11, 19 @ 3:17 pm:

    A quick Google finds Wisconsin is 32.9 cents per gallon.
    Chicago is always high because of the blends for pollution.


  12. - Bigtwich - Thursday, Jul 11, 19 @ 3:18 pm:

    If I read Gas Buddy correctly, his station is charging $2.84. A station .5 miles north in Wisconsin is charging $2.79. Two stations about 1.2 miles east, in Illinois are charging $2.77.

    4


  13. - Blue Dog Dem - Thursday, Jul 11, 19 @ 3:19 pm:

    Granson. Your pretty critical on those who can least afford it. Were you that critical on JB for dodging taxes on the toilet bowl caper or is that different.


  14. - jc19pd2 - Thursday, Jul 11, 19 @ 3:22 pm:

    Rich, as I noted the other day on here. When I traveled up I-39 through Rockford, gas was uniformly $2.85 from Springfield on up. But the last stations in Illinois were $2.61. The price in Wisconsin was $2.57-$2.65. This was well after the price increase. I wasn’t sure if the owners of the Illinois border stations were trying out their own version of a buffer zone.


  15. - Anyone Remember - Thursday, Jul 11, 19 @ 3:23 pm:

    Practical Politics -
    “Curious” - the data is out there, if you’ll look. COGFA & IOC also have data on this post report.
    https://www.auditor.illinois.gov/Audit-Reports/Performance-Special-Multi/Performance-Audits/2013_Releases/13-Road-Fund-Expend-Mgmt-Audit-Full.pdf


  16. - Pick a Name - Thursday, Jul 11, 19 @ 3:24 pm:

    Oh, so small businesses can be hurt by raising their costs??

    Bigtwich, gas a couple of days ago in Springfield cost $2.72/gallon, yesterday many stations were at $2.99


  17. - Six Degrees of Separation - Thursday, Jul 11, 19 @ 3:24 pm:

    ===Far more of the new capital budget should have been devoted to maintenance. Too many brand new projects.===

    I didn’t see many really new things that don’t exist now. Two new passenger rail routes, both on existing railroads, and one mostly on a line currently used by Amtrak. No new-route highways.


  18. - Blue Dog Dem - Thursday, Jul 11, 19 @ 3:25 pm:

    Grownups may speak like the above. The American consumer lets his wallet do the talking.
    I am not advocating shopping out of state. But just look at union produced goods and services. If all thinga are equal consumers buy the low price.


  19. - CPA - Thursday, Jul 11, 19 @ 3:29 pm:

    Just tax the rich for infrastructure. No more regressive taxes.


  20. - A Jack - Thursday, Jul 11, 19 @ 3:42 pm:

    Perhaps border station owners should diversify and buy marijuana seller licenses. I bet they would get a lot of cross border traffic for that. And possibly sell some gas too.


  21. - oh? - Thursday, Jul 11, 19 @ 3:48 pm:

    sorry…any 3:47 be me


  22. - Blue Dog Dem - Thursday, Jul 11, 19 @ 3:50 pm:

    CPA
    You should know by your name. The rich know how to avoid taxes. Just ask this gov.


  23. - oh? - Thursday, Jul 11, 19 @ 3:53 pm:

    “The best thing to do is to try and never get so far behind again”….sounds like a pension fund parallel to me. Put off a roof leak repair until the floor has to be replaced and whine about it…Illinois history.


  24. - Cubs in '16 - Thursday, Jul 11, 19 @ 4:00 pm:

    ===If all thinga are equal consumers buy the low price.===

    That’s a pretty big if.


  25. - Cubs in '16 - Thursday, Jul 11, 19 @ 4:02 pm:

    @AJack:

    That was my first thought when I read Mr. Patel’s comments. Adapt and overcome. That’s something most business owners have to do at some point.


  26. - Demoralized - Thursday, Jul 11, 19 @ 4:08 pm:

    ==gas a couple of days ago in Springfield cost $2.72/gallon, yesterday many stations were at $2.99==

    Which had absolutely nothing to do with the gas tax.


  27. - Soccermom - Thursday, Jul 11, 19 @ 4:09 pm:

    Am I the only person who has ever lost a tire because I hit a huge pothole? That once cost me about 100 bucks — or the increased tax on 500 gallons of gas. I’d much rather pay the higher price and not have to pony up an unexpected $100 for tire repairs. And when you add in my feelings about being stuck on the side of the road with a disabled car…


  28. - Steve - Thursday, Jul 11, 19 @ 4:20 pm:

    It’s hard to compete when you are next to a cheaper area. This gas station will be out of business unless Wisconsin raises their gas tax very soon.


  29. - Keith - Thursday, Jul 11, 19 @ 4:29 pm:

    It’s a valid concern to be sure. $3.59/gal for regular near me in Lincoln Park, with $3.79/gal on Western in Logan Square, compared to the $2.85/gal for regular in East Chicago where I refueled after work today.


  30. - Facts Matter - Thursday, Jul 11, 19 @ 4:38 pm:

    A “buffer zone” with lower taxes close to the border would likely violate Article IX, Section 2 of the Illinois Constitution - the uniformity clause - “In any law classifying the subjects or objects of non-property taxes or fees, the classes shall be reasonable and the subjects and objects within each class shall be taxed uniformly. Exemptions, deductions, credits, refunds and other
    allowances shall be reasonable.”


  31. - Steve - Thursday, Jul 11, 19 @ 4:40 pm:

    In hindsight , this owner wishes he sold his business when it appeared Rauner was going to lose. If he had sold then he wouldn’t have faced this situation. Taxes can have consequences , especially when you are on the frontline of higher taxes.


  32. - phenom_Anon - Thursday, Jul 11, 19 @ 5:06 pm:

    It’s too bad we can’t do something else to help the border businesses, utilizing advantages Illinois has, like maybe let them sell marijuana snacks.

    If you live in Cairo, there’s no gas station or grocery store anymore. Just rundown empty buildings. Take a quick drive across the river and there’s nice, new gas stations and convenience stores with full parking lots. And of course a fireworks store nearby as well.


  33. - SIUEalum - Thursday, Jul 11, 19 @ 5:31 pm:

    Before the cigarette tax increase, how many cigarettes did Mr. Patel sell to Wisconsin residents?

    I used to be in the area of the Mobil station for work and I saw Wisconsin plates all the time there and people buying cigarettes inside. How much money did this station make on tobacco before the tax increase? Cuts both ways.

    BTW, Mr Patel is a really nice guy.


  34. - Candy Dogood - Thursday, Jul 11, 19 @ 5:55 pm:

    Where I live I watched the gas prices go up by $.20 exactly at almost all of the stations. I’m safely in land.

    I drove past about a half dozen gas stations that morning, and noticed that one had only increased their prices by around $.12 demonstrating that the free market works.

    Mr. Patel has had the benefit for years of having a lower state motor fuel tax than Wisconsin has and now his state motor fuel tax is approximately five whole cents per gallon higher — I understand that that does equate to something like a dollar for most customers.

    Someone should ask Mr. Patel what his mark up is per gallon and find out if he practiced free market economics and reduced his mark up in order to be competitive.


  35. - Tim - Thursday, Jul 11, 19 @ 6:32 pm:

    If I lived near the border I would cross it whenever possible to avoid paying Illinois taxes just out of principle.


  36. - Oswego Willy - Thursday, Jul 11, 19 @ 6:37 pm:

    ===…just out of principle.===

    (Sigh)

    Applying logic, doing it out of principle must feel good, but… lol


  37. - Harvest76 - Thursday, Jul 11, 19 @ 6:41 pm:

    ==If I lived near the border==
    What principle might that be? The one where you use the roads here at a lower cost and insist someone else pay for it? BTW, enjoy those awful Wisconsin roads while you can, they will have to raise their gas tax soon too.


  38. - Oswego Willy - Thursday, Jul 11, 19 @ 6:44 pm:

    I also have family who “out of principle” won’t spend here, do this, there, complain about things that are unrelated to whatever beef they want to have…

    … if it truly makes you feel better, have at it.

    Math is math, at some point my family will see the time and cost versus spite… does it really feel *that* good?

    To the Post,

    Once these “Rings of Righteous” start, are we going to have to make sure the equality of righteousness allows for fairness too to those farther away?

    If you are in favor of these tiers, I’m curious, are you also going to vote for the progressive income tax too?

    Hmm.


  39. - Shermanite - Thursday, Jul 11, 19 @ 7:01 pm:

    It’s not so much the price I pay at the pump to fill my car that concerns me. What I’m curious about is how soon the various service providers (waste haulers, FedEx, UPS, lawn service, appliance service, etc.) will also pass their added costs on to me.


  40. - Anonymous - Thursday, Jul 11, 19 @ 7:01 pm:

    Much ado about nothing. 6 months from now wont hear a peep about it.


  41. - FoolishSophist - Thursday, Jul 11, 19 @ 7:15 pm:

    Rich -

    I initially agreed with you about the problems with a buffer zone, but I think I’ve changed my mind. There is some percentage of drivers who will make a point of not buying IL gas because of the tax difference if there’s another option reasonably close at hand. Under the current system, we’ll lose them (and their sales tax revenues, such as they are) to other states. With a buffer zone, we’d be likelier to keep at least a portion of those sales tax revenues.

    But let’s make things a little more complicated:

    1) The buffer zone applies only to sites within n (3?) miles of an out-of-state competitor. No point competing with across-the-border gas stations on roads where there’s not one close by to compete with.

    2) The tax level in each part of the buffer zone is set at 1 cent/gallon below whatever the bordering state charges for its just-across-the-border gas stations…so it’s actually slightly to other states’ drivers’ advantage to cross into IL to buy gas and whatever incidentals they pick up while they’re stopped.


  42. - Mama - Thursday, Jul 11, 19 @ 7:16 pm:

    He should move his business elsewhere or convert the gas station into a food store or something else.


  43. - M - Thursday, Jul 11, 19 @ 7:33 pm:

    I wonder how many of those people not buying gas on the IL border are working in WI?


  44. - Stuntman Bob's Brother - Thursday, Jul 11, 19 @ 7:50 pm:

    ==Unfortunately, “risk” is also a well known business factor==
    There’s a lesson in here somewhere for entrepreneurs deciding which side of the border to open new businesses. Maybe the state can apply some kind of TIF incentive to help out border businesses? Or would we rather we lose them altogether?

    On a side note, it’s probably not much comfort for Mr. Patel, but even without the new gas tax, he would have had to make future decisions on headcount due to the new minimum wage law anyway.

    And not to say “I told you so”, but the increased gas tax is another reason the proposed progressive tax rates did not go high enough or broad enough, they should have mimicked those of our hero neighbor state, MN.


  45. - Dave W - Thursday, Jul 11, 19 @ 8:57 pm:

    I live a few minutes from the Missouri border. When I filled up this past weekend in MO, the gas was $2.39, while it was $2.89 right across the river in IL. There was a line waiting to get into the parking lot, and all of the plates were from IL.


  46. - truthteller - Friday, Jul 12, 19 @ 6:10 am:

    same logic would apply to liquor sales, cigarette sales, right? So we are expected to subsidize a business because it borders a neighboring state with lower taxes? Ok so lets do that BUT triple the vehicle registrations for people in those areas to subsidize THEIR business owners…


  47. - IlliniSpartan - Friday, Jul 12, 19 @ 8:39 am:

    Grew up near the Indiana border. Gas has always been cheaper over there than in IL (over the last 20 years anyway) and the Gas stations on the IL side have managed to stay in business just fine. Gas prices have been high for a while, and with fluctuations, I’ve seen them higher at times than they are now WITH the gas tax.


  48. - NorthsideNoMore - Friday, Jul 12, 19 @ 10:56 am:

    Geographcally challenged stations are no doubt going to suffer and the more “land locked” stations are not going to see much change. States and local govs with a gas tax count on a certain % of sales coming from someplace other than their own community. When that % goes down the burden is on the locals. Maybe we can sell Spotted Cow beer in Illinois and reverse the trend?


  49. - PrairieDog - Friday, Jul 12, 19 @ 11:40 am:

    Is it really fair to question the “logic” of a gas station owner who’s made an off-the-cuff remark in response to a reporter’s question?

    It’s easy to admit there will be “some pain” after a tax increase has gone into effect. Advocates were not worrying too much about that pain while the increase was being debated.


  50. - Da Big Bad Wolf - Monday, Jul 15, 19 @ 11:39 am:

    So if the Mobil in S. Beloit is $2.84 and the nearest gas station in Wisconsin is $2.79, the difference is 5 cents/gallon. For a 12 gallon tank that comes to $.60 more. If the Wisconsin station is a half mile further and it takes ten minutes more to get to it and ten minutes more to drive from it, a person from Illinois will be “earning” $1.80 an hour to save on gas.


Sorry, comments for this post are now closed.


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