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Question of the day

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Illinois

* James Warren asks his readers a question…

What would the current state gas tax of 19 cents per gallon be if it had been indexed to inflation since it was last raised in 1990?

The answer…

Your per-gallon gas tax would be 32 cents, instead of 19 cents, if indexed to inflation since 1990.

* The Question: Keeping in mind that the gas tax (Road Fund money) is not a price percentage-based tax like the sales tax on gasoline (which goes to General Revenue), but a per-gallon tax, do you think that the state’s gas tax should be automatically indexed to inflation?

posted by Rich Miller
Tuesday, Apr 27, 10 @ 11:30 am

Comments

do you think that the state’s gas tax should be automatically indexed to inflation?

For shoots and giggles?

Or to pay for the capital program instead of video gaming?

Or to pay for mass transit?

Or to pay for upkeep on roads?

Or high speed rail?

Yes.

Comment by George Tuesday, Apr 27, 10 @ 11:32 am
I’m about as anti-tax as you can get, but I would support this. The gas tax which funds our roads should be either indexed for inflation, or some other mechanism to keep pace with construction costs and miles driven.

I certainly am apposed the Obama administration’s talk of Big Brother GPS tracking of the miles I drive. Granted it’s a logical approach, but a hell of an invasion of personal privacy.

Comment by Downstate Illinois Tuesday, Apr 27, 10 @ 11:34 am
Man oh man, what a porkfest that would create.

But I’m all for it. It’s shameful how far we’ve let things deteriorate, and the return on “real” capital investment (not statues and other member initiatives) will drive the rest of the tax base higher with a more productive state economy.

Comment by Vibes Tuesday, Apr 27, 10 @ 11:46 am
I think I could support this. IF, that is, there were a legal, iron clad, audited-yearly, under penalty of death to state officials, assurance to gasoline buyers that the tax really would go towards road maintenance and construction. There have been so many state funds raided and emptied and spent for other purposes that people will be justifiable wary of any move to increase gas taxes without such assurances and public verification.

Comment by Responsa Tuesday, Apr 27, 10 @ 11:54 am
Side note here, but isn’t the price of gasoline part of the CPI calculation? I’m no mathematician, but would a self-reference (or more likely a preceding-year reference) as a part of the formula be a problem?

Comment by Sewanee Tuesday, Apr 27, 10 @ 11:55 am
Double the gas tax!

Comment by More Transit Tuesday, Apr 27, 10 @ 11:55 am
I like the idea. It would be a great way to try to close the budget deficit, and based on the theories of supply and demand shouldn’t actually increase the price of gas by very much for very long.

Comment by Rollin' Tuesday, Apr 27, 10 @ 11:56 am
And pave the exurbs!

Comment by More Roads Tuesday, Apr 27, 10 @ 12:06 pm
==
IF, that is, there were a legal, iron clad, audited-yearly, under penalty of death to state officials, assurance to gasoline buyers that the tax really would go towards road maintenance and construction.
==

I’m extremely anti-tax too, but I’m with Responda. I’d also add the caveat that the funds wouldn’t go towards lots of additional projects such as high speed rail or anything. Just to maintain and the occasional widening of our current highway infrastructure.

The problem is, money is fungible. Even if we had an iron-clad agreement that the new monies would stay in the Road Fund, is there anything stopping the fine folks in Springfield from simply siphoning off an equivalent dollar amount into General Revenue? I’d want to make sure the education/lottery fiasco wouldn’t happen again….

Comment by ABCBoy Tuesday, Apr 27, 10 @ 12:08 pm
The interstate system of over 40,000 miles was largely funded by a Federal gas tax that was enacted for the purpose of building the interstate system. At the time of its inception, the federal tax was 3c a gallon and the price of a postage stamp was also 3c. Since then, the federal tax has risen to 18.4c a gallon and a postage stamp has risen to 44c - so the federal gas tax has not kept up with inflation, either. And, like the state gas tax, much of it has been diverted to other uses such as mass transit, non-interstate roads and bridges, and beautification and “enhancement” projects.

A common suggestion has been to eliminate most or all of the federal gas tax and make the states responsible for all road taxation and funding, or at least everything except for the original interstate system which could remain the only responsibility of the feds. Sounds like a better idea than raising the state gas tax…if you trust your state to make prudent decisions with the extra revenue.

Comment by Six Degrees of Separation Tuesday, Apr 27, 10 @ 12:19 pm
ABC Boy. Of course there is nothing stopping them.
The whole idea behind Quinn’s tax increase on the middle class “to prevent cuts in education,” is to put the new monies in education so as to free up monies for other stuff. Like…huge union raises (contract negotiations coming up soon), lots and lots of new patronage hires, member earmarks, earmarks, earmarks….

As to indexing the gas tax…isn’t there a concern that this could contribute to inflation?
Inflation, I suspect, is going to be the big economic issue in a few years. And it is deadly.

Comment by cassandra Tuesday, Apr 27, 10 @ 12:21 pm
absolutely yes. not indexing to inflation means that this tax has gone down, rather than up. when looking to tax hikes, we should look to tax items with negative effects on the environment or public health.

Comment by Robert Tuesday, Apr 27, 10 @ 12:26 pm
As soon as GA Members and Constitutional officers agree to take a pay cut of 10% effective immediately, I will support it. I know that size cut to their salaries won’t add up to the amount of money we need to solve all our problems. But, it would be a symbolic good start. If you want to make cuts to save money, don’t pick up a stack of paper, pick up a mirror.

Comment by So. Ill Tuesday, Apr 27, 10 @ 12:27 pm
Maybe we could use it to rebuild the roads so they could sustain the heavy truck traffic vs. slapping a new surface of asphalt on every few years. Why heck yes, invest in Illinois’ asphalt road pavers.
At least until the oil runs dry.
And how about giving me a bigger tax credit for buying a Prius.
This road/oil culture has reached its Zenith. We better find a better way down.

Comment by Vole Tuesday, Apr 27, 10 @ 12:46 pm
Rich, I told you before, the proper choice is not “gold at the end of the rainbow”, it’s “wish on the evening star”.

Comment by steve schnorf Tuesday, Apr 27, 10 @ 1:30 pm
Nope, nope, nope

Response to Vole, if you think a Prius is good for you, your family and the environment, go buy one and don’t expect everyone else to support your decision. We need to get out of the habit of throwing resources at people who can actually afford to do what they perceive as the right thing. You can expect a gold star and a pat on the back, but as far as a cash rebate from the State, get real.

I love all the justifications on how indexing any tax to inflation would be better than what currently exists. It’s just a con game to strip money from the public. The problem in Illinois in particular is that no matter how much revenue is raised, the legislature will spend more than it receives and will need more revenue anyway.

Keep in mind that the gross consumption of all motor fuels is supposed to fall whenever the fleet average rises. The overall expectation is that actual consumption of fuel is to drop when efficiency and alternate fuels kick in.

What will happen to the revenue stream if the Clarity, Leaf and Volt become mainstream?

Comment by Plutocrat03 Tuesday, Apr 27, 10 @ 1:45 pm
Of course not!

You give a government a dime, they spend a million dollars. They don’t care what they do with your money, because it isn’t their money. Every dollar taken from you is a dollar you don’t have to make your own choices in our market.

Don’t be so gullible!

Comment by VanillaMan Tuesday, Apr 27, 10 @ 2:09 pm
“do you think that the state’s gas tax should be automatically indexed to inflation?”

I wasn’t sure, but VanillaMan talked me into it.

– MrJM

Comment by MrJM Tuesday, Apr 27, 10 @ 2:18 pm
This comment thread reflects some of the discussion at the Transportation Summit: If people are confident that the increased revenue will produce improvements in their quality of life, they do in fact enthusiastically support such transportatrion infrastructure initiatives. Even, as in this thread, “no more taxes” people.

Comment by Paul Tuesday, Apr 27, 10 @ 3:00 pm
Even, as in this thread, “no more taxes” people.

Gee sorry. I’ll try to do what pro-taxers do and you know, suspend common sense and reality.

Comment by VanillaMan Tuesday, Apr 27, 10 @ 3:07 pm
Kendall County voters approved a countywide sales tax to fund transportation improvements a few years ago, after twice rejecting it. The margin was close, something like 53-47. This, in the fastest growing county in the US from 2000-2010. On the third try, the backers made sure that specific improvements were advertised and linked to the sales tax increase. The results are now starting to take place as tangible projects, and I haven’t heard too many rumblings of regret.

Comment by Six Degrees of Separation Tuesday, Apr 27, 10 @ 4:02 pm
raise it as much as you want to. I, and everyone else close to a border already buy our gas in other states where the gas tax is much cheaper. Its kind of odd that MO. keeps its roads in better shape than IL. does on so much less gas tax. Go ahead and raise it, everytime you do that line that makes it cheaper to cross those money saving bridges pushes a little further back, and allows more people to drive out of state and save money. But hey, at least you are spending tens of millions of dollars to build a 4 lane road for under 5 miles on Rt. 146 to make it easier to get to MO to spend our money there.

Comment by Anonymous Tuesday, Apr 27, 10 @ 4:51 pm
Yes

We have a large number of unsafe bridges, not tomention new roads, expansions etc. This just esta lishes that we can buy the same amount of construction today as when it was passed.

Waiting for bridges to collapse etc and spending larger sums in crisis mode are bad methods to handle infrastructure.

Comment by ghost Tuesday, Apr 27, 10 @ 4:53 pm
With a rational, representative, honest, and effective government? let’s talk.

With our current group of odds and sods? No way!

Comment by Park Tuesday, Apr 27, 10 @ 6:41 pm
STAR Bonds are back and what an absolute disaster passage of this BILLION dollar state sales tax subsidy for a private development will be. Any legislator that votes for this boondoggle is nothing short of nuts ! Rich, keep on eye on this one because a handful of people will make multi millions off of this sweetheart deal if it passes.

Comment by What a Joke Tuesday, Apr 27, 10 @ 7:15 pm
To Anonymous: The reason that MO has better roads is that there is about 6 inches of topsoil before you hit rock. IL has about 20 feet of soil before you reach rock… Illinois has the best soil in the world for raising crops, but the worst soil for building roads…

Comment by Downstate Commissioner Tuesday, Apr 27, 10 @ 8:53 pm
The 19.0 Cent MFT Tax is currently divided between the State (~45%) and Local Agencies (55%). Therefore, any increase would have a direct benefit to local highway departments (Municipal, County, and Road Districts). These agencies did not receive much in the latest Capital Bill; furthermore, they had to accept 80,000 pound vehicles on their roads.

Comment by Highway Engineer Tuesday, Apr 27, 10 @ 8:54 pm
–You give a government a dime, they spend a million dollars–

Spoken like a true, risk-taking, private-capital entrepreneur — right?

Comment by wordslinger Wednesday, Apr 28, 10 @ 5:43 am
“Response to Vole, if you think a Prius is good for you, your family and the environment, go buy one and don’t expect everyone else to support your decision. We need to get out of the habit of throwing resources at people who can actually afford to do what they perceive as the right thing. You can expect a gold star and a pat on the back, but as far as a cash rebate from the State, get real.”

I threw that in just as an absurd way of saying what you did. The tax credits for purchasing green machines works at cross purposes with the effort to raise taxes from motor fuel sales to maintain roads.

But, my main point is that the tax on fuels issue is just another signal of our hopeless efforts to sustain a system built on cheap oil. Add peak oil to our growing list of reckonings. Someday, all these reckonings will snowball into the biggie. We inch closer as if you need any reminders. We just ain’t got the vision to change the mission.

Comment by Vole Wednesday, Apr 28, 10 @ 7:50 am
The State of Illinois is responsible for less than 12% of the public road mileage carrying 56% of the traffic in the state while Local Government is responsible for the remaining 88% of the mileage carrying 44% of the traffic. Basic Local Government road maintenance costs rose 90% from 2000 to 2008 alone. The unmet needs of local roads and bridges in Illinois prior to the recent “Illinois Jobs Now” capital program was $2.6 Billion per year! The statutory distribution of Motor Fuel Tax (MFT) revenue between IDOT and Locals protects that revenue stream quite well (although the State recently increased fees off the top reducing disbursements). Once delivered to Locals the statute limits expenditures exclusively to road and bridge and related expenses of the unit of Local Government (with the exception of Cook County). The most direct cost-benefit “User Fee” for highway and bridge infrastructure is MFT. However, the state MFT rate hasn’t been adjusted since January 1, 1990. The state transportation related revenue increases since then have been through Secretary of State (SOS) fees which do not benefit Locals at all unless provisions are made during the time that the increases are crafted and implemented. This did happen with the SOS fee increases of “Illinois First” so that Locals boats could “rise equally” with IDOT’s on the increased user fee revenues.

Legislators, legislative leaders and the governors office were all made well aware of these facts and many other facts that would support a fair distribution of revenue between the State and Locals before and during the capital program discussions that eventually yielded “Illinois Jobs Now”. Result? “Illinois Jobs Now” swept 100% of the SOS fee increases into a “bond paying only” fund with all other increased revenues (gaming, liquor, candy, pop). Bonds from that fund can pay for any capital project regardless of whether it is transportation related or not. Even IDOT isn’t guaranteed use of those increased funds let alone Local Government. Local Government was promised $500 million to be distributed via the MFT formula from bond proceeds of “Illinois Jobs Now”. Local Government hasn’t received 1 cent of that distribution yet. We’re not confident we ever will. Meanwhile state roads and bridges were “promised” over $6 billion from “Illinois Jobs Now”. And the bond paying fund will continue to receive the increased revenues after these bonds are paid off leaving Local Government with no increased revenue stream while costs continue to rise. In addition, the legislature raised the legal limit on Local Roads to 80,000 pounds knowing the cost to accommodate such loads was estimated to cost Locals an additional $4.3 billion per year.

Increasing and indexing the state MFT is truly the most intelligent and rational thing to do for highway and bridge infrastructure but legislators and the governor do not want the money to go back to the hands of the local decision makers. They don’t want your local County Engineer, City Street Superintendent or Township Highway Commissioner to apply the funding in a needs based fashion. They don’t even want the qualified Professional Engineers at IDOT to make needs-based determinations on the most effective use of the funding for state highways and bridges. In recent years they have raided the IDOT Road Fund (which receives 63% of the state’s share of MFT) for non-highway and bridge purposes which relegates the MFT user fee to a general tax status. They prefer to continue to collect revenue system-wide and keep it all to dole out in a manner that best suits their political needs. Needs that bare no relationship to the actual needs of the transportation infrastructure. The statutory distribution of MFT does not suit those goals. Perhaps an increase with an index to road and bridge maintenance costs combined with an elimination of all fees off the top and a greater percentage going to Locals to both better protect the proper use of more of those user fees and to restore equity between the highway and bridge responsibilities of Locals vs State.

Comment by MFT1 Wednesday, Apr 28, 10 @ 1:10 pm