Illinois Policy Institute's July forecast: Continued tax hikes and costly conditions on the roads
Illinois Policy Institute (IPI) estimates that the $45 billion infrastructure plan Gov. J.B. Pritzker recently signed into law will mean hundreds of dollars more in annual car costs for most Illinois motorists by virtue of the state’s gas tax doubling to 38 cents, and vehicle registration fees jumping to $148 as of July 1.
While some of the motor-cost tax hikes are reported to be among the state's steepest increases this summer – with the gas tax alone expected to raise as much as $1.2 billion – they’re hardly the only ones. Taxes on cigarettes, e-cigarettes, parking and real-estate transfers also went into effect on July 1.
The hikes are projected to raise Illinois’ total gas tax burden to the third-highest in the country, and that could be only the start if local governments decide to make good on the increased taxing authority afforded them under a plan that is tied to inflation, and could see increases on an annual basis. Illinois is already one of just seven states to hit motorists with both a general sales taxes and special excise taxes on gas at both the state and local levels. Motorists are also on the hook to pay higher license plate sticker fees beginning in 2020.
With that, IPI projects all those increases are more than enough to offset all of the promised income tax savings being sold by Pritzker as part of his “fair tax” plan, which voters are set to weigh in on at the polls in November 2020.