By John F. Di Leo
December 17, 2018 A.D.
The bankrupt city of Chicago’s outgoing Mayor, Rahm Emanuel, and the bankrupt state of Illinois’ incoming governor, J.B. Pritzker, are calling for a huge increase in Illinois’ gas tax, ostensibly to fund a major transportation bill.
Illinois hasn’t raised its gas tax, now at 19 cents per gallon, since 1990. If we were to keep up with inflation, a 20 to 30 cent per gallon increase – that is, to double it or more – would be reasonable, in their view. They’re just proposing that it keep up with inflation since 1990, that’s all.
Or maybe raise it a little more than that, while we’re at it, just for good measure… I mean, as long as we’re in there anyway, may as well make it worth the trip, right?
And on its face, that does make some sense. Look at inflation since then. On its face, viewed in its own “petri dish” setting in a controlled environment, such an increase is perfectly logical.
But does the real world work like a controlled environment? Can tax policy, in fact, ever be set without consideration of the real world around us?
We could start by thinking about what that 20 or 30 cents per gallon really adds up to, as minor as it may sound, as presented here.
Let’s split the difference and use 25 cents for our math. 25 cents doesn’t sound like a big deal.
But on a twelve gallon economy car fill up, that’s another $3.00. On a twenty gallon minivan or SUV fillup, that’s another $5.00… and that’s just on that one fill-up.
How often do you fill up the car each week, or each year?
Consider your family’s average miles driven per year, per car, and how many cars you have in the family.
If your family drives 15,000 miles per year on an average mpg of 17, that’s 882 gallons, or an increase of $220/year in just this one gas tax increase.
Or, if your family drives 30,000 miles per year on an average mpg of 20, that’s 1500 gallons, or an increase in $375/year in just this one gas tax increase.
And what if you drive more? And what if your gas mileage is worse?
These few hundred dollars a year may not sound like a lot, but remember, everyone in your neighborhood will be in the same boat. Your local shops, fast food places, restaurants and malls will feel it, as the thousands of people in their community, cumulatively, suddenly have tens of millions fewer dollars in spending money, and one by one, those local businesses – already struggling – falter, and eventually fail.
What if the Illinois economy continues to plummet (and it will), causing you or yours to drive farther to your regular job or to a part-time job, adding to your fuel consumption, not to mention eating further into your quality of life? The higher the tax, the more miserable it becomes to stay here; the more likely you’ll be to join the statistics of people fleeing Illinois for Iowa, Missouri, Indiana, Kentucky, or Tennessee… or even for Florida, Louisiana, Oklahoma, and Texas.
When taxes are already too high, and conditions already too poor, it just doesn’t take that big a tax increase to be the straw that breaks the camel’s back, and sends you packing.
Since they want us to think about 1990, let’s do so, shall we?
The last time Illinois raised its gas tax, Illinois had a reasonably healthy economy. In 1990, Mike Madigan had only ruled the state for a few years, and he had to do so in a power-sharing arrangement with the senate president and governor that the now almighty King of Springfield has long since abandoned.
In 1990, Illinois wasn’t bleeding businesses, jobs, and taxpayers… yet.
In 1990, while Illinois was still a national joke for its crime and its weather, the state was not yet at or near the bottom of every livability poll on the internet. In fact, to stress how long ago that was, in 1990, there was, as yet (for all intents and purposes), no internet at all.
In short, Illinois could theoretically absorb a small gas tax increase at the time
(just three cents, in fact, that year, from 16 cents to 19 cents).
Illinois had problems then as now – Illinois has always had problems – but the 3 cent/gallon gas tax increase of 1990 could easily pass without notice.
The tax hikers of 2018 and 2019 therefore do us a considerable disservice in throwing 1990 in our faces, because things couldn’t be more different today.
In recent years, neighboring states have engaged in spending cuts, tax rate reductions, pension reforms, state employee hiring freezes, public university tuition freezes, and more. Reforms have been on the minds of the governors and legislatures that surround Illinois, especially since the 2010 elections.
For the past eight years, Illinoisans have watched with mixed feelings as each of their neighbors made the tough choices to do what it takes to make their states prosper in a challenging economy…. We have been happy for our neighbors as these improvements continued, but we have been frustrated at home, as our own city fathers, county boards, and statewide elected bodies have stubbornly refused to alter the tax-and-spend habits of their mentors.
And so it is that Illinoisans have watched local manufacturers and other businesses flee, sometimes to the third world, but often just to those nearby “greener meadows” – just over the state line in all directions. Illinois government’s foolishness has, after all, been a boon to Wisconsin, Indiana, Iowa, Missouri, Kentucky, and Tennessee, as so many of our employers and taxpayers have found that a mere ten, twenty, or fifty mile move could turn their businesses from failure to success.
Today, Illinois is bleeding people and businesses at an unprecedented rate. Depending on how you count it – and there are various ways – we are looking at many tens of thousands of people and jobs crossing the border every year. The change doesn’t show as well in the census numbers, because of birthrates and both legal and illegal immigration… but it certainly shows in the tax rolls, as existing businesses struggle, and former businesses just disappear, finding our neighboring states to be far more gracious hosts than Illinois.
Does Illinois have a problem, and does that problem cost money to fix? Of course.
But that doesn’t require the collection of funds that don’t exist, through taxes that would just drive more and more needed taxpayers away, leaving things that much worse for tomorrow.
Illinois needs to learn a lesson its neighboring states learned years ago: how to cut costs, drastically, to accomplish what is truly needed at a lower cost to the taxpayer, enabling reductions in tax rates… never increases.
Illinois needs pension reform at all government levels; the current model isn’t just unsustainable, it’s lethal. Illinois needs to cut business and personal income taxes, cut sales taxes, and cut property taxes. It’s the only way to stop the bleeding of job losses and desirable-taxpayer flight.
Such tax cuts, however, are impossible unless we drastically reduce the size of government. And that requires cuts in bureaucrat pay and benefits, reduction of government staffs at almost all levels, and in particular, an end to the intentional importation of the welfare state clients that contribute the most to Illinois’s crippling welfare state safety net.
There’s little we can do about the need to provide taxpayer-funded public schools, police and fire services for taxpaying residents, and healthcare for poor Americans. But all these are made far more costly by the constant influx of criminal gangs of foreign origin and the continual swelling of the illegal alien community.
The many levels of government that have illegally proclaimed themselves “sanctuary cities” and “sanctuary counties” – a list that includes the city of Chicago and the county of Cook – have gone so far as to turn the already bankrupt northeast corner of Illinois into a magnet for all kinds of illegal aliens – from decent jobseekers to welfare recipients, from eager students to vicious gang members. Even the very best of these newcomers generally impose some financial burden on the taxpayers, and the worst of them (the muggers, drug dealers and killers) impose physical injury on the people and utterly overwhelm our immense criminal justice system as well.
The state’s problems can be solved. It’s not easy, but with draconian cuts to the welfare state and a true war on crime that includes making Illinois anathema to potential illegal aliens, Illinois could again be the economic powerhouse that its pedigree says it should be.
Unfortunately, in election after election, majorities of Illinoisans keep populating their public offices with left-wing majorities, filling our county boards, city halls and state legislatures with people committed to making the problems worse rather than ever trying to solve them.
Emanuel and Pritzker are proposing to try to navigate a river’s lethal rapids in a quickly collapsing boat, when what they should be doing is to trying to remove the boat from the rapids entirely so it can be fixed.
We will know when they get serious about fixing the problem: When they propose tax cuts instead of tax hikes… when they propose removal of the prevailing wage for government contracts, allowing competitors to bid fairly and openly for projects… when they shut the door on illegal aliens and enforce the law… when they admit the need to stop overpromising unsustainable benefits to their employees, and instead set reasonable employee contribution and rational retirement caps on pension plans.
Until the Illinois Combine starts making such real changes, there’s no justification for any compromise. Every single proposal they make outside the real cures – however low or reasonable the price may sound in a vacuum, as they present it – is just another push to drive away the tax base we so desperately need to retain.
Copyright 2019 John F. Di Leo
John F. Di Leo is a Chicagoland-based Customs broker and trade compliance trainer, writer and actor. His columns are regularly found here at Illinois Review.