The coalition is opposed to Gov. Rod Blagojevich's plan to expand the state's motor fuel tax to off-road vehicles, citing that it will cost the state jobs and economic investment in a freight rail improvement plan, while failing to raise its projected revenue.
Business Leaders for Transportation and a diverse group
of industries, labor unions and policy groups have come together as the Illinois Coalition for Fair Fuel T axes in
opposition to
Gov. Rod Blagojevich’s plan to expand the state’s motor fuel tax
(MFT). The proposed expansion of the MFT is part of the Governor’s budget for
fiscal year 2005 that is currently under consideration in Springfield.
Members of the coalition
agree that the tax hike would threaten jobs and economic investment
throughout Illinois and have urged the General Assembly to reject the proposal,
which would apply the tax to a wide range of businesses that use diesel fuel in
off-highway vehicles and machines.
“This
proposal will affect employers across the state, most importantly those
businesses that contribute to our standing as the transportation hub of the
nation,” said MarySue Barrett, president of the Metropolitan Planning
Council.
The motor fuel
tax was created in 1929 as a way to charge users of highways to pay for their
construction and maintenance. Industries that
used motor fuel for non-farm, off-highway purposes were exempt from
the tax because most either maintained their own infrastructure or did not
cause any wear and tear on the public way. In the face
of a fiscal crisis, Gov. Blagojevich now
seeks to expand the tax to many of the businesses and industries that were
originally exempt from the MFT — such as manufacturers, construction
contractors, mining operations, railroads, warehousing, package delivery
facilities, barges, ships, and retailers — costing these industries an
estimated $74 million in new taxes.
This proposal would not only make Illinois the first state in the nation to
expand the MFT to off-highway uses, but also heavily burden the business
community, some of whom are considering moving part or all of their operations out of
state in response to the proposed MFT hike and other increasing costs of
doing business in Illinois.
Expanding
the MFT would have an ironic effect on the industry that builds roads and
highways, with most of the $20 million in new taxes to be incurred by increased
construction costs to the industry’s largest client – the State of Illinois.
“Illinois business
reinvestment and expansions are based on
predictability. Predictability equals trust, and
trust equals investment,” said Jerry Roper, president of the Chicagoland Chamber
of
Commerce. “The motor fuel
tax creates a lack of predictability that will lead to decreased investment in both
infrastructure and employees.
The
bottom line is, expanding the motor fuel tax is bad for workers, bad for
business and bad for the Illinois economy.”
More than 50 percent of all state
and local taxes in Illinois are paid by businesses, according to a March 2003
report by Ernst & Young.
Last
year, Blagojevich’s budget included more than $600 million in new taxes and fees
on businesses.
Please join Business Leaders in opposing the proposed
expansion of the Motor Fuel Tax to non-farm, off-highway uses by writing the
governor and the General Assembly. Click on the following for a Voice of the People op-ed.
For more information, contact Karyn Romano, MPC transportation director, at 312-863-6005.