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Question of the day

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Illinois

First, the setup:

Revenue from the state sales tax on gasoline could help fund bonds for a $4 billion capital improvement program for schools, roads and environmental projects throughout Illinois, according to state Rep. Bill Mitchell.

The Forsyth Republican held a news conference Monday at the Edinburg Village Hall to announce his proposal, which he expects to formally introduce as legislation in January. He said he brought up the idea now to generate discussion.

“We have not had a capital spending bill in three years,” Mitchell said. […]

“Each and every time we go to the pump to buy gasoline, we pay a tax to the state. If we must continue paying that tax, then I would like for the state to dedicate that steady stream of income to paying back bonds for capital improvement projects that are desperately needed,” he said.

The state sales tax rate is 6.25 percent, which includes a 1.25 percent share for local governments.

Could you support a tax hike if the proceeds were used for capital improvement projects? Why or why not?

And, yes, I’m aware that Mitchell is not proposing a tax hike. Here’s the rest of the story:

Mitchell said he is not proposing an increase in that tax, nor is he suggesting that the state use the revenue local municipalities collect. Rather, he said, the state’s share of the gasoline sales tax should go toward infrastructure projects rather than be deposited in the general fund to pay other- state expenses.

posted by Rich Miller
Tuesday, Nov 14, 06 @ 8:39 am

Comments

Does this mean Republicans finally want a capital bill? Or is he setting up a bill for failure by trying to tack on a tax increase to the idea.

He probably wants a capital bill. As do a lot of people. And given that they push for one every year, I am sure one is coming through the pipe at some point.

Comment by JohnR Tuesday, Nov 14, 06 @ 8:50 am
Sorry - to answer the question - Yes.

IF the money is focused on investing in things that bring returns: our roads, mass transit, schools, etc.

Comment by JohnR Tuesday, Nov 14, 06 @ 8:51 am
I’m not sure where Rep. Mitchell has been for the last 6 months, but Blago already has had his own personal capital improvement program in the form of over $45M passed out to communities for pork projects in exchange for votes. Why don’t we figure out a way to pay for those little gifts before we come up with another spending idea?

Comment by Little Egypt Tuesday, Nov 14, 06 @ 8:57 am
If such a tax were legislated to be temporary, non-renewable, and somehow forced to be spent on capital improvements, then I would possible support such a tax. Of course, since the tax would be spent on capital improvements like gambling revenues are spent on education, I won’t support the idea.

Comment by Greg Tuesday, Nov 14, 06 @ 9:03 am
It would be a refreshing change in Springfield attitude. But the first step is gas tax=good roads. We are so far behind in Road maintenance of state highways as the gas tax has been thrown out the side door for other purposes.

Capital projects other than infrastructure maintenance will require large dollar amounts of Bonds. Normally they would be full faith and credit, general obligations, of the State. The use of the gasoline tax woulkd define the dollars of bonds which might be sold. If bonds were sold with this security only, debt service could not be greater than 67% of annual revenues. and the remaining 33% could be used, annually, for other projects.

That would mean that the prokers would have to lay off that source of meat a cookin’.

The fiscal discipline is good. I would support.

Comment by Truthful James Tuesday, Nov 14, 06 @ 9:06 am
It would be nice if the corruption tax we pay in Illinois actually went to capitol improvement projects.

Comment by Irritated Tuesday, Nov 14, 06 @ 9:07 am
It depends on the capital improvement project. I would support this if it’s for a project like high speed rail, rather than just more roads. We need a little bit of transportation diversity in Illinois, and every dollar spent on rail creates more jobs than the same dollar spent on roads.

Comment by Squideshi Tuesday, Nov 14, 06 @ 9:12 am
Whoa there Rich!

Letâ€™s clarify for those who might not bother reading the entire linked article. Rep. Mitchell is NOT - I repeat NOT - proposing a tax hike. In fact, the very next line in the story after you cut out is â€œMitchell said he is not proposing an increase in that tax, nor is he suggesting that the state use the revenue local municipalities collect. Rather, he said, the state’s share of the gasoline sales tax should go toward infrastructure projects rather than be deposited in the general fund to pay other- state expenses.â€

In that, I agree with him: the money from gasoline taxes should be used exclusively for capital projects.

I donâ€™t believe that we should increase the existing gas tax. All that will do is punish working and middle class families that donâ€™t havenâ€™t bought a hybrid yet. Take, for example, my brother â€“ a union construction worker. After his apprenticeship, he bought a nice new Saturn Ion. Was the best car he could get for his buck, but the gas mileage isnâ€™t as good as, say, the Civic hybrid that came out a few years later. Eventually, when heâ€™s ready for a new car, heâ€™ll probably make the wise investment in better mileage, but he canâ€™t afford a trade up right now. Why should he have to pay even more in gas taxes than the Civic driver who uses the same roads just as frequently?

There should be incentives for hybrids, donâ€™t get me wrong. But they should be on the income tax side, not the user tax side. The roads need to get fixed, and everyone who drives on them should pay their fair share. Weâ€™ll need to find extra sources of revenue, in addition to the gas tax, to help offset losses in that stream as a result of better gas mileage and hybrids. But donâ€™t punish people like my brother, just to spite SUV drivers.

Comment by grand old partisan Tuesday, Nov 14, 06 @ 9:15 am
sure, this might sound good, but how is the state supposed to replace the 4 bilion that would be taken out of the general revenue fund? it’s not as if the money is just sitting there - it’s already being spent on other programs. On the face of it, this proposal would only cause more financial harm than good.

Comment by a friend Tuesday, Nov 14, 06 @ 9:26 am
We have had a problem with Blagojevich thinking that every dime he gets from anyone goes into his pocket. Unlike other governors who understand budgeting and fiscal responsibility, we cannot depend on Blagojevich to do the right thing with our money. So, expect worried legislators to propose these bills.

Mitchell is right, Blagojevich is wrong. But that doesn’t stop the General Assembly from doing what Blagojevich wants. Therefore, Mitchell’s proposal is spot on, but will be ignored.

Comment by VanillaMan Tuesday, Nov 14, 06 @ 9:32 am
So the general idea is to take the state’s existing gas tax and dedicate it not to the General Fund, but to capital projects for road and rail? Without knowing more than that, it seems a smart idea that’s well worth considering. I tend to agree with Squideshi, however, that the money would be better spent on road mainentance (rather than expansion) and transit expansion. Chicago isn’t the only region that needs more transit funding; how many cities could use more money to buy cleaner fuel or hybrid buses? I’m sure MetroLink in St. Louis could use more help on our side of the river as they essentially rebuild the old Illinois Terminal RR passenger system in Metro East. And don’t worry, Grand Old Partisan; those of us who read Rich’s entire entry know that Rep. Mitchell isn’t proposing a tax hike.

Comment by Nort'sider Tuesday, Nov 14, 06 @ 9:43 am
I think that gas tax should be used only for roads/transportation. If we could have public officials that leaved designated taxes for the purpose intended, I would be for 1% sales tax with half going only on needed infrastructure and other half to payoff money owed to hospitals, phamacies etc. The infrastructure monies would be doled out for a REAL need. However, it seems impossible that we could find enough honest citizens to make equitable determinations for any of these suggestions. Sad.

Comment by Joannie Tuesday, Nov 14, 06 @ 10:12 am
thanks for the clarification, Rich

Comment by grand old partisan Tuesday, Nov 14, 06 @ 10:28 am
If it’s for mass transit and road maintenance, I’m for it. If it is to build new roads I am against it.

Comment by Way Northsider Tuesday, Nov 14, 06 @ 11:19 am
The local radio guys, 970 am, made a great comment on revenue. The State used to have a 1% sales tax on groceries that, according to their show, brough in in excess of 1 billion. And, they antecdotaly noted how most people did not notice when the tax was removed. Perhaps adding this 1% back in would provide funds the funds to GRF so that the gas tax revenues can go where they are needed.

Comment by Ghost Tuesday, Nov 14, 06 @ 11:47 am
Sounds way too easy. Where is the money going now? I know that money is fungible, but presumably the current beneficiaries of state gas tax largesse would not react kindly to its
being yanked out from under them. Who would get cut? Sure, we should end the corruption tax, cut the grossly overpriced Illinois state bureaucracy, stop jailing first time drug offenders, and eliminate the pork grants. But that would take a major effort and more time than we have before the next budget is due.

Comment by Cassandra Tuesday, Nov 14, 06 @ 12:02 pm
Sounds like a good idea, but it would also set a precedent of putting dollars back where they were earned and not dumped into GRF to be used someplace else. If gas dollars stay in transportation related areas, then all DHS Medicaid dollars gained by community agencies’ Medicaid billing should stay within DHS. Revenues in DNR should stay in DNR. Education bucks should stay within Education.

Comment by zatoichi Tuesday, Nov 14, 06 @ 12:06 pm
Hmmm, tax hike if the proceeds were used for capital improvement projects? How about tax hikes for the Constitutional requirement for funding pensions or pay raises Merit Comp employees or any other empty promise the Executive or Legislative branches have put forth. What happened to Build Illinois and Illinois First, remember them? I say no on a tax hike for any new projects. Take care of “Old Business” first.

Comment by It makes cents Tuesday, Nov 14, 06 @ 12:18 pm
In IL, we will probably never have “true” high speed rail because all the proposals use existing lines where there is freight train interference and grade crossings, and they go relatively slow. To do a true Japanese or European style 120 mph+ HSR on dedicated right of way with no freights or grade crossings would be cost prohibitive, unless the rate of return could be improved from what I’ve seen. More rail expansion might divert a few trips off the highways or short haul air trips, but anyone who thinks rail will totally solve congestion is smoking it big time. The Roaring Elgin, North Shore and Illinois Terminal died for a reason…because people don’t always want to go where the train goes, or on its schedule. That being said, rail does have its place and Metra should be extended and the STAR line wrapped around to the south suburbs. Widen existing roads where needed, and judiciously build new ones with heavy contributions from developers or via ISTHA expanding the toll system.

That being said, the tax swap being proposed here is to pay back Peter, who was originally robbed to pay Paul.

Comment by Six Degrees of Separation Tuesday, Nov 14, 06 @ 12:44 pm
Nope, I do not trust them to spend the money as intended. It will probably be a lotto type system where they money goes to its intended area, but other money leaves that area, so nothing is really gained.

Comment by Wumpus Tuesday, Nov 14, 06 @ 1:02 pm
I agree with funding outstanding debts. Stop the gifts-for-votes and start funding past commitments. NO NEW PROGRAMS UNTIL YOU PAY THE BILLS.

I would vote for that!

Comment by NoMorePork Tuesday, Nov 14, 06 @ 1:05 pm
Read, read, read! They are not talking about GAS tax dollars, they are talking about sales tax dollars, which go to the GRF.

Comment by steve schnorf Tuesday, Nov 14, 06 @ 1:36 pm
So “Revenue from the state sales tax on gasoline could help fund bonds for a $4 billion capital improvement program” is not about gas tax dollars?

Comment by zatoichi Tuesday, Nov 14, 06 @ 1:50 pm
No way! No way! No way! All this would lead to is further budget deficits. I understand that these things may be “needed.” But if you can’t pay for it, and I mean really pay for it, there is no point in proposing something that would obviously increase debt. The fact that this isn’t a tax hike just shows that it will bring more debt. Either raise taxes, or cut spending. Maybe try paygo sometime! It works wonders for balancing a budget!!!

Comment by Lovie's Leather Tuesday, Nov 14, 06 @ 3:17 pm
zatoichi-no it’s not. It would be much harder to do bonds out of gax tax dollars, because that would be instead of rather than in addition to, the regular road program.

Comment by steve schnorf Tuesday, Nov 14, 06 @ 3:27 pm
hey richie rich,
i hear tim martin at idot got the ax. check it out. word is jason tai or clayton harris will take over on the first of the year.

Comment by howard Tuesday, Nov 14, 06 @ 3:48 pm
Howard - 3:48

Check out Crain’s Chicago Business article dated November 13, 2006 regarding Martin.

Comment by Anon. Tuesday, Nov 14, 06 @ 4:34 pm
NOt another penny until all outstanding bills are paid.

Comment by huh? Tuesday, Nov 14, 06 @ 5:00 pm
Ghost, there already is a state 1% sales tax on groceries. Depending on where you live, it can be up to 2%.

Comment by Crockett Tuesday, Nov 14, 06 @ 5:03 pm
No, how are we goiong to get the matching dollars for frederal road fund monies if we keep spending our road fund monies. Bad idea.

Comment by MIDSTATE Tuesday, Nov 14, 06 @ 5:05 pm
SDoS –

please explain your Peter/Paul analogy. I am mystified.. I thought it was taxpayers money.

Regarding High Speed Rail — this would be the great public works project of the 21st Century. With Chicago as the hub, it would maintain our area as an economic epicenter.

Yes all level grade crossings would have to be eliminated. That is by far the biggest cost

The keys to HSR are quite simple. In addition to passenger, you will have ground fast freight. Financing would be done through single state or multistate Commission leving a one cent property tax and a one cent sales tax. The proceeds would be used to finance bonds to build the roadbed, install the mag lev system, and allow for double trackage in areas to permit safe movement in both directions. Terminals would be in large cities within a 450 mile radius. They would be hubs of downtown rehabilitation . Way stations en route could hav temrinals built as well. The Commission controls the scheduling, the signalling and the maintenance of the track.

Transportation companies including already formed airlines would buy their rolling stock and bid for slots in the movement schedule. Highest bid for a departure slot would be approved. They would issue tickets, man the trains, just like they do now.

Some ancillary results include opening up slots at O’Hare and Midway as well as others..

Comment by Truthful James Tuesday, Nov 14, 06 @ 6:01 pm
What programs are going to get cut? Shifting money out of the general revenue fund, means that somebody doesn’t get health care, some little kiddy doesn’t get an education, etc. Those are the “main stays” of governot’s first term in “office”.

Since a reb proposed it, the dems won’t even consider it. Business as usual.

Comment by huh? Tuesday, Nov 14, 06 @ 6:19 pm
I hereby propose that there be a law than revenue received by the State for specific purposes can only be spent on those items.

This would drive Blago nuts.

Comment by DRB Tuesday, Nov 14, 06 @ 7:06 pm
Build high speed rail? How about finding a way to allow our regular intercity trains to go top speed with no interference. (has anyone ridden AMTRAK?) That in itself would dramatically reduce travel times and especially reliability. It would be a better first-step plan than all-new technology built on the cheap. Does mechanical car-catching nets at grade crossings sound like a good idea to anyone?

Comment by NoGiftsPlease Tuesday, Nov 14, 06 @ 8:13 pm
Absolutely not. I don’t trust Blago or the legislators with any more of my money.

Comment by Anon Tuesday, Nov 14, 06 @ 8:15 pm
While tax increases were not proposed, I do think that taxes that are suppose to go for a specific purpose should do just that. Taking money that should go for roads to build something or fund something that will generate votes is not in the best interest of our citizens.

In answer to the other question, we do not need new taxes and I would not support any new taxes. What we need is to cut into program money and balance the budget. Unfortunately, this is not likely to happen any time soon.

Comment by CCMcCall Tuesday, Nov 14, 06 @ 11:09 pm
Truthful,

It’s taxpayers money. But road fund is now diverted from transportation to the tune of several hundred mil per year, so in order to replace it, state sales tax on gasoline is diverted to transportation cover the shortfall. What will be diverted to cover the shortfall where the sales tax on gas used to go? It’s all a shell game.

Comment by Six Degrees of Separation Wednesday, Nov 15, 06 @ 1:16 am
Actually, I’d prefer to fly around like the Jetsons. It’s the 21st century now, isn’t it?

Comment by Six Degrees of Separation Wednesday, Nov 15, 06 @ 1:19 am
Just say no â€“

Iâ€™d be glad to let you see my apartment and car some time. Youâ€™d see that, while I am more fortunate than many, I have hardly hit any sort of lottery.

Now, I donâ€™t mean to pry, but what are you doing on the blogs at 9:00am? Shouldnâ€™t you be at one of your two jobs. Saying that you donâ€™t have time to attend vocational training on a blog for political junkies with too much time on their hands raises some questions in my mind. And I donâ€™t know too many minimum wage jobs that give you access to the internet, and if youâ€™re having trouble making ends meet at home, then why are you spending money on a service provider? If youâ€™re at the library, enjoying public access, please, check out some of the books around you. Maybe then you wonâ€™t be among those who â€œarenâ€™t good at school.â€

Far be it from me to call you a liar, but it does seem as if you are either misrepresenting your lot in life, or you also arenâ€™t good at time management and financial prioritization.

Comment by grand old partisan Wednesday, Nov 15, 06 @ 2:14 pm