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Quinn doesn’t like gas tax hike * UPDATED x1 *

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Illinois

*** UPDATE *** “Premature” does not mean it won’t happen, by any stretch of the imagination…

Gov. Pat Quinn said today that talk of a huge state tax increase in next month’s budget proposal is “premature,” and he reminded local officials and interest groups lobbying for more money that times are tight. […]

“It’s premature to talk about that now,” Quinn said as he entered the Capitol through its main North entrance, a marked departure from Blagojevich’s habit of using a basement utility tunnel. “But when we have the plan, we’ll lay out in full detail what the needs are and how to pay for it.”

[ *** End of Update *** ]

* As I told subscribers this morning, Gov. Quinn isn’t at all enthused with increasing the motor fuel tax to pay for the capital bill…

While the governors meeting focused in large part on building the nation’s infrastructure, Illinois hasn’t approved a major public works program in a decade. Part of the problem was Blagojevich’s strained relationship with legislators, but funding remained a major stumbling block. Now, lawmakers there are floating the idea of using a gas tax to pay for it.

But after talking with fellow governors about how to pay for infrastructure improvements, Quinn said a gas tax hike sounds “counterproductive.”

“If we want to wean ourselves from a petroleum-based economy, then we can’t be using that particular source of funding to invest in the things we need to do to become energy-efficient,” he said.

The governor, who plans to run for re-election in 2010, said he’s “never been excited” about the gas tax because it is an excise tax that isn’t based on a customer’s ability to pay. But the idea of the gas tax as a user tax, to pay for infrastructure doesn’t make sense, because infrastructure is more than just roads, he said.

Quinn suggested that infrastructure plans should include non-transportation items — such as laying fiber optic lines along highways — to promote telemedicine, online education and Internet commerce.

The Senate Dems are looking at a 16-23 cents per gallon increase in the tax. The House Dems are mulling an 8 cents per gallon hike. But Quinn doesn’t appear to love either idea.

To raise a billion dollars for capital, he’d need about a third of a percentage point income tax increase. But that’s without all the exemptions he wants to put into place for lower income taxpayers. Some downstaters are looking at the income tax for capital, but the income tax will probably also have to be raised to close the budget deficit.

* Semi-related…

* Govs’ Q & A: Avoiding deficits post stimulus

* Illinois to Get First Chunk of Stimulus Money. But they’re unclear on how much it will be, and what it can be used for.

* Reform committee wraps up second hearing

* Illinois officials call for letting public see secret investigations of corruption

* Ill. government inspectors want more transparency

* State salary data ought to be online

* Green Party leaders in Illinois slam Senate President John Cullerton’s comments opposing campaign finance reform

posted by Rich Miller
Wednesday, Feb 25, 09 @ 10:54 am

Comments

Wow — someone actually saying stuff that makes sense. It is funny how sometime you don’t even realize how twisted in knots our political dialog has become.

I have been a proponent of raising the gas tax simply because I know we need the money and it is the only thing out there right now that seems doable and makes some sense. But he is totally right that a) it is shortsighted because we ultimately need to STOP using gas and b) putting the cost of infrastructure on the backs of people who buy gas really isn’t fair since infrastructure means a lot more things than just roads and c) a gas tax, like any fee, hits low income folks disproprtionally — how is it fair that the people who earn the least pay the most (as a percentage of their your income) to maintain the things we all use?

Cripes, if we’re not carefull the next thing you konw he is going to start trying tell people that the earth revolves around the sun (something 20% of our population currently is not aware of or does not believe).

Comment by Lakefront Liberal Wednesday, Feb 25, 09 @ 11:03 am
Unlike most other taxes, we want and benefit from the gas tax’s substitution effects. The tax has to depend on the usage of gas in order to create these incentives and achieve a price that reflects actual cost (govt support). If you want to rebate a portion of proceeds to people, fine, but the rebate could not be proportional to their gas usage without undermining the effect (eg, you could throw on a $2/gal tax and then distribute 75% of the proceeds equally among households.)

Comment by Greg Wednesday, Feb 25, 09 @ 11:18 am
I am one of those who felt that Quinn didn’t deserve a “honeymoon” when elevated to the position of Governor.

I will give him credit here. If he keeps looking for long term solutions instead of short term fixes, I may have to actually reassess my position about his “honeymoon!”

Comment by Louis G. Atsaves Wednesday, Feb 25, 09 @ 11:27 am
Parts of Quinn’s argument make sense. A gas tax is regressive, and infrastructure can be more than roads, bridges, and transit.

Aren’t the excise taxes on cigarettes targeted for health care initiatives? By Quinn’s logic, taxing cigarettes is a poor idea since the source of revenue will decrease, meaning fewer dollars for health care. I can’t envision any pol advancing that cause. Schoenburg and Cullerton are seeking to increase that tax, right?

Moreover, if the idea, along with raising revenue, is to provide disincentive for a particular behavior (driving), why is raising the gas tax poor public policy? Quinn’s statement reflects a desire to become more energy-efficient. But doing so necessarily means less reliance on motor fuel.

Mayor Daley has provided oodles of proof that if you tax something long enough and at a high enough rate, people will find alternatives (bottled water is a good recent example).

Comment by The Doc Wednesday, Feb 25, 09 @ 11:28 am
**Mayor Daley has provided oodles of proof that if you tax something long enough and at a high enough rate, people will find alternatives (bottled water is a good recent example).**

Are people actually buying less bottled water in Chicago as a result of the tax? I honestly do not know.

It is difficult to compare tax on cigarettes for health care to the current gas tax debate. People do not have to smoke, but they do need transportation. Hence, when we talk about utilizing taxes as a disincentive to the activity being taxed, there needs to be a reasonable alternative available when it comes to transportation. That is not the case with smoking. Downstate, driving is pretty much the only game in town, depending on where you are. Until we have better public transportation systems down there and/or better access to fuel efficient vehicles, we cannot use a higher gas tax to incent people to take on “better” behaviors.

This does not touch on the valid point that with the cigarette tax, we ideally want revenues to decrease, so it is not (hopefully anyway) a sustainable funding stream.

Comment by montrose Wednesday, Feb 25, 09 @ 11:41 am
Montrose, the city’s revenue raised as a result of the bottled water tax has fallen far short of their projections, suggesting that residents are purchasing bottled water outside city limits.

You’ve somewhat validated my point. That is, since there’s not much of alternative for many drivers, particularly in rural areas, the gas tax will have the intended effect of raising the revenue needed to fund the capital bill. And I’ve argued that expanding mass transit should be a priority in any capital bill for this very reason.

Lastly, we can certainly affect drivers’ behavior to a point, namely by providing the incentive to purchase more fuel-efficient vehicles.

Comment by The Doc Wednesday, Feb 25, 09 @ 12:07 pm
I agree with all of quinns points. BUT I would suggest that a small tax on gas would still be appropiate. Maybe 3-4 cents a gallon. Then you can look at funding the res with more long term solutions, such as GRT.

Comment by Ghost Wednesday, Feb 25, 09 @ 12:11 pm
===GRT===

Um, that idea is deader than Rod Blagojevich’s political career.

Comment by Rich Miller Wednesday, Feb 25, 09 @ 12:12 pm
–Quinn suggested that infrastructure plans should include non-transportation items — such as laying fiber optic lines along highways — to promote telemedicine, online education and Internet commerce.–

We’re getting a whiff of the unfocused Quinn here. You’re governor now, dude, not a gadfly.

We are, and will be for quite some time, a gasoline engine society. We need roads; we need good roads; we need to pay for them somehow. Good roads are vital for bringing goods and services to market; building good roads puts people to work.

In opposition to what others have said, a gasoline tax does not fall disproportionately on the poor; it is paid by all in exact portions as to how much they drive and the fuel efficiency of their automobile.

I ride the el and walk; I drive less than virtually anyone I know. But let’s get real here.

Comment by wordslinger Wednesday, Feb 25, 09 @ 12:12 pm
Maybe Quinn is channeling California. I believe they finally dropped their gas tax proposal but they imposed a”temporar” income tax surcharge and also significantly raised vehicle licensing fees. Many Californians are not happy, of course, California being the land of cars.

California also imposed some very significant cuts
which we haven’t seen here.

But I do think the various state governments watch either to see how various schemes play out.

Comment by Cassandra Wednesday, Feb 25, 09 @ 1:12 pm
I think Gov Quinn is simply stating the obvious. Of course, an infrastructure plan needs to include more than just roads, bridges, and mass tran. It needs to include sewer and water projects, brownfields reclamations, energy conservation, public buildings (esp schools), etc. I am a little curious about relying on only MFT to pay for all of it. If it were me, I would probably add 50 cents or so to the tobacco tax, maybe pick up one or two other small sources (alcohol, video poker?) to balance out the revenue sources for the whole package.

Comment by steve schnorf Wednesday, Feb 25, 09 @ 1:20 pm
Its too bad on the GRT. The concept itself is in play in other states, with some tweaking and set at a more reasonable level it might have been a viable source

Comment by Ghost Wednesday, Feb 25, 09 @ 1:31 pm
Rich,

Thanks for the link on the Sullivan income tax hike plan.

Comment by QuincyNews Wednesday, Feb 25, 09 @ 2:08 pm
Steve S.-

I find it amusing, that with the current diversions of MFT money to non rooadway and especially non-transportation related uses, that we are now considering raising the gas tax higher so that even more money can be raised and diverted.

Comment by Six Degrees of Separation Wednesday, Feb 25, 09 @ 5:42 pm
6, we could end the diversions, but then we would have to raise the gas tax or something else to backfill the holes at SoS, IDOT, State Police, etc

Comment by steve schnorf Wednesday, Feb 25, 09 @ 6:22 pm
Why shouldn’t IDOT road and highway expenses be paid from the Road Fund and MFT Fund?

Comment by Smitty Irving Wednesday, Feb 25, 09 @ 6:54 pm