Illinois considering gas tax hike

Illinois considering gas tax hike
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Illinois is considering increasing the amount of money drivers in their state will have to pay at the pump to help pay for transportation projects, Illinois television station WGEM reports

Illinois lawmakers have proposed to increase the state’s 19 cents per gallon gas tax by 13 cents, according to the report. The increase would be offset by the elimination a 15-cent sales tax that is currently applied to gasoline purchases, resulting in slight reduction in total price per gallon that will be paid by drivers in the state. 

The additional gas tax money would specifically earmarked for Illinois road projects. The levy will be collected on top of an 18.4 cents per gallon federal gas tax that is charged to all drivers in the nation to fill the federal government’s transportation funding coffers. 

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The American Petroleum Institute says the gas tax increase will bring the total amount of money that drivers in Illinois are charged at the pump to more than 50 cents per gallon. 

Illinois is the latest in a series of states to consider increasing its gas tax in recent years as federal transportation funding has dried up. 

Lawmakers in Congress are currently facing a May 31 deadline for the expiration of federal transportation funding, and they are struggling to come up with a way to pay for an extension of the measure. 

Transportation advocates in Washington have pointed to the willingness of states like Illinois to raise their own gas tax as evidence that a national hike would be politically palatable this year. 

Conservative groups in Washington have made clear that they would consider an increase in the federal fuel levy a tax hike, however.

The gas tax has been the main source of transportation funding for decades, but it has not been increased since 1993, sapping its buying power.

While the tax hike has backing from business associations and unions, opposition from conservative groups such as Heritage Action and the Club for Growth has caused GOP leaders in the House to suggest it is a non-starter.

The federal government typically spends about $50 billion per year on transportation projects, but the gas tax will only bring in $34 billion annually without an increase.