Politics at the pump: Illinois Democrats’ election-year plan to pause gas tax hike sparks backlash from station owners

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CHICAGO — By Fourth of July, Illinois drivers likely will be greeted at the gas pump by 4-by-8-inch signs informing them that as they fill their tanks, they’re actually saving money, courtesy of their elected leaders in Springfield.

Legislation pushed through in the closing hours of the General Assembly’s truncated spring session this month freezes a scheduled hike in the state’s gas tax for six months. The measure, now awaiting Gov. J.B. Pritzker’s signature, includes a stipulation that every gas station in the state post a notice informing drivers about the gas tax freeze.

That requirement, laid out in a single paragraph in the Democrats’ 923-page election-year tax relief plan, has gas station owners grumbling and Republicans howling. Democrats have responded by calling their GOP colleagues hypocrites because their party pushed a similar election-year proposal two decades ago.

The fact that the law requires gas stations to pay for the signs or be fined and that the placards be in place when the hike would have taken effect on July 1, as the state budget year begins and just days after the June 28 primary, has emboldened critics to say the effort is little more than the latest example of old-school, gas-pump politics.

But Democrats, who correctly note that while Republicans complained they nevertheless voted for the measure, are defending the sign requirement.

In addition to the gas-tax freeze, the $1.8 billion package approved by lawmakers in the early morning hours April 9 also includes a one-year suspension of the 1% sales tax on groceries, direct payments to taxpayers and a property tax rebate.

Democratic lawmakers say the package is a sharing of the wealth with residents who are struggling with record inflation as the state enjoys its strongest financial performance in decades.

“We want our citizens to know that … Illinois government is on the mend, we’re in the best fiscal health in a generation, and we’ve done this for them,” sponsoring state Rep. Mike Zalewski, a Riverside Democrat, said when the plan was debated on the House floor in the middle of the night on the final day of the legislative session.

Still, none of the Democratic leaders who negotiated the proposal — neither Pritzker, House Speaker Emanuel “Chris” Welch of Hillside nor Senate President Don Harmon of Oak Park — would claim credit for the gas pump sticker requirement that was included in the final package.

The state gas tax, currently 39.2 cents per gallon, is set to increase by 2.4 cents on July 1, according to the state Department of Revenue. But with Pritzker’s signature, that bump will be pushed off until Jan. 1, with the exact amount to be determined by where inflation stands at the end of September. Drivers will be hit with another increase on July 1, 2023.

“Consumers across the state need to realize: The state’s going to get their money,” said Josh Sharp, CEO of the Illinois Fuel and Retail Association. “They’re not putting this off indefinitely or forever. They’re just putting it off until after an election.”

The association, which represents gas station owners, has threatened to file a lawsuit over the sticker requirement, arguing that it violates businesses’ free-speech rights.

“Our members just do not like being told that they have to engage in and participate in speech that they don’t want to have anything to do with,” Sharp said. “The state of Illinois doesn’t get to tell our members what they have to say at the pump. That’s not their job, and doing so, we feel, is unconstitutional.”

Once the measure becomes law, gas stations who fail to post the notice would be subject to a fine of $500 per day.

Sharp and other critics note that Pritzker and the Democratic-controlled legislature didn’t require service stations to post a notice at the pump when they doubled the gas tax to 38 cents per gallon in 2019 and tied future increases to the rate of inflation. The extra revenue is being used to fund road and bridge upgrades through Pritzker’s $45 billion “Rebuild Illinois” infrastructure program — another theme voters will be hearing a lot about this year.

Gas station owners aren’t the only ones griping.

Republican lawmakers, who voted for the plan — stickers and all — to avoid going on the record against tax breaks, say the savings will be paltry. A driver who fills up a 15-gallon tank each week, for example, would save less than $10 over six months.

What’s more, they argue the mandate for gas stations to post the notice smacks of electioneering.

“That sounds like something that somebody would do that pushes the line on campaign ethics,” retiring GOP Rep. Mark Batinick of Plainfield said during the House debate.

Republicans already are making it a campaign issue, with both the state GOP and one of the party’s governor candidates referencing the stickers in fundraising emails in recent days.

The Democrats’ response? We got the idea from your side of the aisle.

In 2000, Republican Gov. George Ryan called lawmakers back to Springfield to address skyrocketing gas prices. Along with GOP Senate President James “Pate” Philip of Wood Dale, Ryan pushed a plan to suspend the state sales tax on gasoline, then 5%, for six months.

At the time, gas in the Chicago area was averaging above $2 per gallon — more than $3.30 per gallon in today’s dollars, still well below the average of nearly $4.46 cents per gallon as of Wednesday.

While 2000 wasn’t a year for statewide elections, it was a presidential election year and the GOP-backed plan required gas stations to place a sign on their pumps informing those at the pump about the tax freeze. It was sold as a way to make sure the temporary tax savings, estimated at about 10 cents per gallon, was passed along to consumers rather than pocketed by businesses.

The GOP proposal, which like this year’s plan was approved on overwhelming bipartisan votes in the House and Senate, was characterized by one of its few opponents, Chicago Democrat and then-House Majority Leader Barbara Flynn Currie, as “the incumbent reelection plan of the year 2000.”

“I would urge you all to take a careful look at the policy, not the political implications,” Currie said before the House voted to approve the plan on a 106-5 vote.

The handful of Democrats who opposed the plan included then-House Speaker Michael Madigan and then-Rep. Sara Feigenholtz, a Chicago Democrat who now serves in the Senate and voted in favor of this year’s plan. They raised concerns that it would put a strain on other areas of the state budget. A spokeswoman for Feigenholtz did not respond to a request for comment.

Earlier in the week, a Pritzker spokeswoman said it was Republicans, not Democrats, who are playing politics with the price at the pump.

“Alongside Democrats in the General Assembly, we will continue to put working families first, no matter how much Republicans want to manufacture phony political complaints,” Pritzker spokeswoman Emily Bittner said in a statement. “Informing people of the gas tax relief mirrors the same exact effort that Republicans made in 2000.”

Two decades ago, a lobbyist for the industry hailed the move to freeze the sales tax on gas as “the greatest thing since canned beer” and didn’t oppose placing the stickers at the pump. In fact, when the tax holiday ended at the start of 2001, the trade group sent out its own stickers to members, pointing the finger at Springfield for the price increase.

This time around, station owners supported a stalled Republican proposal to permanently cap the 6.25% sales tax on gas — a separate charge levied in addition to the gas tax — at 18 cents per gallon.

The industry also argues that it’s being treated differently than other businesses whose customers will enjoy tax breaks as a result of the Democrats’ plan.

Supermarkets will be required, “to the extent feasible,” to print a notice on their receipts that the 1% sales tax on groceries has been waived for one year. If it can’t be printed on the receipt, “then the retailer shall post the statement on a sign that is clearly visible to customers.”

But unlike gas stations, grocery stores won’t face a fine if they fail to comply.

The disparate treatment of different retailers is all about politics, said Sharp, of the Illinois Fuel and Retail Association.

“I think that there’s several legislators and constitutional officers that are very scared of wearing the jacket heading into the election season for high gas prices,” Sharp said. “And they should be scared. They’re the ones that doubled the gas tax just in 2019.”