There was much celebration among motorist over low gas prices in 2016, but the price slump was a hard hit for Texas. | Mike Mozart / Flickr
There was much celebration among motorist over low gas prices in 2016, but the price slump was a hard hit for Texas. | Mike Mozart / Flickr
Gas prices could soon be rising by as much as 10 cents per gallon in Illinois, courtesy of the state’s new record-setting budget plan that removed a six-year-old 20 percent tax exemption on wholesale gas prices.
In response, ethanol-mixed fuel prices are expected to rise by between 7 and 10 cents per gallon. The tax exemption had been set to expire in 2018, but state lawmakers ended it early as part of their overall revenue-generating plan.
Sam Barbee, executive vice president of Mt. Vernon-based Illinois Oil & Gas Association, told the Southwest Illinois News said he is concerned about the effects of the increase.
“I know the state needs money, which means regulators will keep digging,” he said. “No one can be sure what that could bring. I do know you get to the point where businesses and people have had enough.”
Barbee estimates that the new tax will generate about $70 million annually, a relatively small amount for the state but a potentially painful blow to the gasoline industry overall.
“With all that’s happened, as an industry we’ve reached our breaking point,” he said. “And the new state budget could mean more of the same for businesses and industries as far as added taxes go. It’s something else businesses have to be concerned with.”
As for the new state budget, lawmakers overrode a veto by Gov. Bruce Rauner to enact a $36.1 billion spending plan that hikes state incomes taxes by 32 percent, meaning personal income tax rates jumped to 4.95 percent from 3.75 percent and corporate income tax rates climbed to 7 percent from 5.25 percent
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