Business Leaders joins forces with Illinois Coalition for Fair Fuel Taxes - Metropolitan Planning Council

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Business Leaders joins forces with Illinois Coalition for Fair Fuel Taxes

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.

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