...continued Legislation proposes 42 percent hike in Illinois’ motor fuel tax

a major expansion of gambling in the state - has pretty much been discarded. He says leasing the lottery proved to be unconstitutional and gambling has taken a big hit lately, with 2008 revenues down about 21 percent from 2007.

   “One of the things that has gotten us into trouble in the state of Illinois in the past are these huge capital programs that we have to pay for for years,” Bradley said. “My focus has been on trying to come up with a more stable program that meets our needs at a consistent level over time.”

   But Bill Fleischli, executive vice president of the Illinois Petroleum Marketers Association, has a problem with raising the motor fuel tax. He says gas station operators had a very difficult 2008. When the price of gasoline shot past $4 per gallon, the cost of a truckload of gas went from about $8,000 to $32,000, stretching the abilities of the retailers to finance the purchase. At the same time, he says, the high price drove down demand - leaving retailers with higher costs and lower profits.

   “If you make a dime on a gallon of gas, that’s a good day,” Fleischli said. “If the customer uses a credit card, you lose 3 percent. It depends on market conditions and competition, but I think the national average last year was between 8 and 10 cents a gallon profit.”

   Fleischli says the problem is compounded because declining demand for gasoline means declining sales on convenience items inside. The convenience store operator gets hit on both sides of his business. Fleischli says raising the motor fuel tax 42 percent is not only the wrong thing to do in these economic times, but is also not warranted.

 “I think the first thing that we should do is find out how much money actually goes into the road funds and if it has all been spent on roads,” said Fleischli. “I believe some of these funds have been swept and some of these funds have been diverted to other uses. All of that should be paid back before we try to tax the people more during a recession.”  Fleischli says Illinois residents already suffer with higher gas prices than their neighbors because Illinois is one of only about 10 states in the country that levies a sales tax on gasoline. “In 1993, the bridge over the Mississippi  River at Quincy was closed

because of the flood,” Fleischli said. “When they shut the bridge down, people couldn’t go across the river to buy their fuel and gasoline sales volumes went up 120 percent in the Quincy area. Even 50 miles away from the river the volumes went up 50 percent to 60 percent. That showed us that people had a plan; they would go across the river to buy their fuel in Missouri and then come back to the Illinois side.”

   According to Fleischli, the two largest gasoline stations in the country are on the Chicago Skyway just across the state line in Indiana. Fleischli says those stations do the most inside sales, the most lottery sales and have the highest volumes of gasoline sales of any stations in the nation. He attributes it to drivers focusing on buying their fuel outside of the state of Illinois.

   Fleischli says the politicians are talking about creating more jobs, but that raising taxes in the middle of a recession is a horrible idea.

   “If they want to do something for the citizens, they ought to take the sales tax off gasoline,” Fleischli said. "It’s as necessary a product as prescription drugs and food are in my estimation. People have to use gasoline to get to work, do their jobs and take care of their children. That’s the reason they took it (the sales tax) off prescription drugs and food, and I think what they ought to do is take the sales tax off gasoline. It would save the consumers a lot of money.”

   While Bradley says he’s not wild about the idea of raising taxes, the state needs the money to repair its roads and bridges - and the question that needs to be focused upon is what is the fairest way to raise those funds.

   “I don’t expect people to embrace the idea of paying an additional surcharge,” Bradley said. “I don’t like it any more than anybody else does. What I want people to do is that they need to think through these issues and try to think in terms of what our needs are and how we pay for our needs - and how we get to where we need to be with the least amount of pain for the state of Illinois and for the people of Illinois.

vice president/coo: Alan J. Ortbals
email: aortbals@ibjonline.com

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