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Gas tax pain but how much gain?
By Marni Pyke | Daily Herald Staff

Drivers may soon have to pay higher state gas taxes. John Moloney of Arlington Heights fills up at Grandt's Shell and Auto Repair in Arlington Heights, where owner Craig Grandt says an increase isn't a good idea, but seems inevitable.

 

Joe Lewnard | Staff Photographer

Craig Grandt pumps gas for a full-service customer at Grant's service station in Arlington Heights.

 

Joe Lewnard | Staff Photographer

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Published: 3/8/2009 12:01 AM

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A state gas tax hike of up to 16 cents is gaining some traction in Springfield to help fund a crucial capital program to build roads, repair bridges and put people back to work.

The major dilemma for Democrats and Republicans is deciding how much of an increase consumers will stomach, given jobless rates and economic uncertainty. Proposals range from 8 cents to 16 cents per gallon on top of the state's existing 19-cent fee.

But that's not the only issue for policy makers. There's the perpetual downstate-Chicago-suburban rivalry for what will be a massive pot of money. A 16-cent boost would generate about $1 billion a year. With loans and matching federal funds it could total a $25 billion public works package.

Odd are the region's population centers - Chicago and the suburbs - will seek the lion's share, as well as pay the lion's share of the tax hike.

And there's the question of how dependable a source of revenue it would be, given the push to use less fuel and the fact the federal highway trust fund, which relies on a flat 18.4-cent tax, is broke.

For now, "we are hoping to have a more concrete, agreed proposal to talk about in the next few weeks," said Rikeesha Phelon, spokeswoman for Senate President John Cullerton, a Chicago Democrat pushing for an increase. "There's no magic number yet."

Republican Senate Leader Christine Radogno of Lemont told the Daily Herald she is open to some sort of gas tax hike. However, Gov. Pat Quinn is unenthusiastic about the idea and other proposals are floating around the General Assembly.

Turf wars

About 65 percent of the gasoline sold in Illinois is purchased in the Chicago metropolitan region, according to the Illinois Petroleum Institute.

Organizations such as the Chicago Metropolitan Agency for Planning contend that a majority of new tax revenues should flow to metropolitan areas that are economic engines for the state.

However in Springfield, "we haven't had discussions about how money from the road fund will be distributed," Phelon said last week.

Dividing the pie fairly is a concern for groups like the Metropolitan Planning Council seeking a logical not political way of distributing money as is the Illinois tradition.

The council backs legislation sponsored by state Rep. Kathy Ryg, a Vernon Hills Democrat, aiming to divvy up new capital funds based on safety, cost-effectiveness, job creation, population, and whether a project can benefit more than one mode of transportation.

General Assembly insiders, however, have their doubts about the proposal's success.

Petroleum industry officials have their own criteria for the legislation if passed and oppose revenues going into a general fund as is the case with the sales tax on fuel.

We want to see a dedication of funds (for transportation)," Illinois Petroleum Institute Executive Director David Sykuta said, adding that otherwise "it's an income tax on motorists, which is not fair."

Experts concur now is the time to act when gas is hovering around $2 compared to the $4 fee that was political suicide.

"We're a very tax-averse society, but 5 cents to 10 cents is almost imperceptible in the context of the price rises we've seen," said Siim SÖÖt, interim director of the Urban Transportation Center at University of Illinois at Chicago.

UIC commissioned a study several years ago asking Illinoisans how they'd stomach a gas tax increase. Surprisingly, those with higher incomes opposed the change more than low-income respondents, SÖÖt said.

Bucking the trend

Illinois' population is 12.85 million, according to recent U.S. Census data. There are 5.6 million people living in suburban Cook plus DuPage, Kane, Lake, McHenry and Will counties. Chicago numbers 2.8 million residents.

Conventional wisdom suggests that suburban drivers who drive longer distances will pay more gas tax. And research shows the longest trips tend to be back and forth to work.

But the reality is more complicated as our employment patterns evolve, urban planners say. "It's a mixed picture," SÖÖt said.

Jobs are moving out of Chicago to employment centers in Schaumburg, the Lake/Cook and I-88 corridors. "One of the biggest changes is the reverse commute to the Northwest suburbs," SÖÖt said.

Another shift is suburban residents working close to home.

More than half the population of Lake County works there - 53 percent. In DuPage, 46 percent of residents have jobs in the county, according to the MPC's 2008 "Moving at the Speed of Congestion" report.

In Kane, 38 percent of residents have jobs there, compared to 37 percent in McHenry and just 30 percent in Will.

"McHenry County is still exporting more workers than it imports and they face some of the longest commutes," SÖÖt said, adding Will County faces a similar situation.

Short-term gain?

Some wonder how reliable revenues will be if the gas tax flies.

Just six months ago, former U.S. Department of Transportation Secretary Mary Peters announced the highway trust fund, which pays for highway maintenance and building, was out of money.

The crisis occurred because the 18.4 cents per gallon federal tax is not geared to inflation or the fact Americans drive less when fuel is expensive, Peters said. Adding to the downward trend is the move toward fuel-efficient and in some cases fuel-free cars.

"In the long-term, there needs to be other methods," said James LaBelle, vice president of the civic group Chicago Metropolis 2020 and a former Lake County chairman.

But in the short-term, Metropolis 2020 backs a higher motor fuel tax, saying if the 19 cent-ceiling was geared to inflation, it would be 32 cents today.

Cullerton spokeswoman Phelon noted, "I think we are all waiting for the day when cars are so fuel-efficient that they no longer run on gasoline - but I think we can rely on this source of income for the near future."

Metropolitan Planning Council Vice President Peter Skosey said a viable future solution is a vehicle mileage tax. The concept of charging people based on miles instead of gallons of gas has momentum and is being tested in Oregon but it's also enraged drivers. When U.S. Transportation Secretary Ray LaHood told AP in February he'd consider such a tax, the White House was quick to throw cold water on the idea.

As state lawmakers search for that magic number, those close to the issue like Craig Grandt of Arlington Heights call it a flawed but inevitable idea.

"It's just another tax they're going to hammer us with," said Grandt, who owns Grandt's Shell and Auto Repair. "People will have to suck it up and eat it."