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Petroleum Marketers, C-Stores, fight proposed Illinois gas tax hikes

5 months ago by Bob Gough

Tax could increase by 10 cents in Illinois

A significant tax hike on motor fuel could be passed into law this year.

Illinois gas station owners and convenience store retailers are joining together to announce their opposition to such a plan.

Carl Adams of Illinois Ayers Oil Company discusses competition with border states.

From the Illinois Petroleum Marketers: 

Illinois gas station owners and convenience store retailers are opposed to any plan that would have Illinois drivers paying higher taxes as they fill-up their gas tanks.  The state already endures some of the highest gas prices in the country, and in recent weeks there has been a lot of conversation at the Capitol about increasing the tax on motor fuel, plus adding more fees for drivers.         

FACTS ABOUT ONE PROPOSED GAS TAX PLAN: 

  • $737 million will be targeted from the wallets of Illinois drivers.      
  • $304 million would be raised by increasing the motor fuel tax.

o   $.07 more per gallon is what drivers should expect to pay for diesel.

o   $.04 more per gallon is what drivers should expect to pay for gasoline.

  • $225 million would be raised through higher vehicle registration and title fees.
  • $208 million would be raised through service fees on automobile services. 

"We need to put the brakes on any plan to raise the gas tax; drivers deserve a break," said Bill Fleischli, executive vice president of the Illinois Petroleum Marketers Association and the Illinois Association of Convenience Stores.  "Illinois should spend the money designated in the Illinois road fund on actual projects instead of diverting so many of those dollars away from their original purpose." 

Illinois Auditor General William Holland released a report in 2013 detailing how the state spent less than half of its dedicated road fund dollars directly on road construction costs in eight of the last 10 fiscal years.  "Illinoisans should be appalled by this," said Fleischli.  "We need to spend the road fund money on maintaining and upgrading Illinois roads instead of raising another tax." 

Amy Chronister Ridley, vice president of retail operations at Chronister Oil and Qik n EZ Convenience Stores, adds, "Illinois already has the highest fuel taxes in the Midwest.  With our state's current economic status, how can we ask consumers to pay more in taxes? Whether it's gas tax, soda tax or income tax, I hear my customers struggling to keep any money in their own pockets.  With tight profit margins and gas prices rising over $3.50 per gallon, businesses are not able to shoulder this extra burden.  We will have to pass the price on to consumers."

 Carl Adams of Illinois Ayers Oil Company (Ayerco) says his business is already facing a grim future in Illinois.  "This is how serious the situation is-we are to the point where we will not expand any further in this state because the market conditions are so poor," said Adams. "It's not worth the investment for us.  An additional tax on gas is only going to drive us further out of business.  We have several gas stations near the border of Illinois and Missouri, and we are already losing customers, and not just on gas purchases. When people bypass our station for one across the river they also often buy add-on items inside the store. Illinois loses all that tax revenue too." 

"I don't see why we would do anything to incent Illinois drivers to buy elsewhere, especially considering the fact that two-thirds of Illinois' population lives within 40 minutes of a bordering state," said Rob Karr, president and CEO of the Illinois Retail Merchants Association.  "We need to support our small local businesses, and a higher gas tax won't do anything to help that." 

Baron-Huot Oil Company, based in Bradley, Illinois, was one of the oldest fuel retailers in the country until it sold out last year.  "With the poor economy, higher taxes on state corporate taxes, talk of raising the minimum wage and the looming impact of Obamacare, it all came to a head," said Kyle Vaubel, owner of Baron-Huot Oil.  "It was too much for us to stay afloat."  Baron-Huot sold its retail assets in 2013, including 10 convenience stores; it remains today focused on wholesale business.  "I think if there is an additional tax on motor fuel and diesel, you are going to see more local businesses go under.  The legislature needs to take this option off the table."       

 


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