Illinois lawmakers were poised to suspend the state’s 5 percent gasoline sales tax after House Speaker Michael Madigan (D-Chicago) Wednesday abandoned his push to attach a sales-tax break on back-to-school items in order to forge an agreement among legislative leaders.
Lawmakers were expected to pass the six-month gas tax moratorium Thursday, the second day of a special session called specifically to deal with soaring motor fuel costs. The agreement calls for gas station operators to affix a sticker to every gas pump in the state informing consumers that the temporary tax break should be reflected in a reduction in the price they pay–about 8 to 12 cents a gallon at current prices.
Top Republican and Democratic leaders in the House and Senate confidently predicted passage of the proposal, which will suspend collection of the tax beginning Saturday and running through the end of the year.
“How do you go back to your district and say, `I didn’t take the 5 percent off?'” said Senate President James “Pate” Philip (R-Wood Dale).
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Madigan cleared the way for the compromise by dropping his plan for the sales-tax “holiday” on school clothes and supplies in late August, saying it lacked support from Gov. George Ryan and other legislative leaders.
But Madigan, looking to use the special session to maximize support for Democrats in the Nov. 7 elections, immediately warned that a net annual loss of more than $100 million of sales tax revenue on gasoline could jeopardize a scheduled cost-of-living increase for health-care workers paid by the state.
Philip dismissed Madigan’s warning, saying Ryan had assured him the 2.5 percent increase agreed on in spring was not in danger.
Nevertheless, the speaker’s statements were sure signs that although he may have given up on one battle, he is focused on winning the war for legislative seats in the fall and will continue to stir up Democratic constituencies over the issue of tax cuts and a living wage for social service workers.
The sales-tax legislation does not contain any enforcement provisions requiring station owners to pass along the tax cut to customers. But it calls for fines of up to $500 a day for owners who fail to attach the signs to the pumps informing motorists about the gas tax cut.
Though Illinois politicians had no role in creating the crisis, they clearly have been poised to exploit it for political advantage.
On Wednesday, Democratic Secretary of State Jesse White announced that the owners of 2 million vehicles whose license plate stickers are due to expire on Saturday will get a 14-day reprieve because gas prices have “been a serious burden to Illinois motorists.”
Chicago Mayor Richard Daley and aldermen formally asked for a federal investigation of alleged price gouging by oil companies, even though they had discarded the idea of following the lead of the state and temporarily reducing the city’s gasoline tax.
Meanwhile, Ryan was in Washington where he told members of the House Judiciary Committee that gasoline prices “teeter on the brink of an emergency situation.”
Because of its impact on pocketbooks, the cost of gasoline has become a hot-button issue that touches virtually every constituency and strikes at the heart of voter motivation: economic self-interest.
It’s rare to run into so many people who know exactly what the legislature has on its docket, Rep. Lou Lang (D-Skokie) said.
“They are pulling me aside to talk about this issue,” he said. “They’re madder now than when it was $2.50 a gallon, because they see prices have come down for no other reason than a lot of jawboning.”
No one is madder than the residents of Rep. Jack Frank’s northwest suburban district centered in McHenry County, where drivers can head a few miles west to Rockford or north to Wisconsin and see lower gas prices. Franks, of Woodstock, is a Democrat in a historically Republican district, and his seat is the battleground for the House’s most heated contest, a challenge from physician Tom Salvi.
At a Woodstock resale shop run by the McHenry County Defenders, an environmental group, volunteer Betty Zahn complained to Franks the other day about her last gas station credit card statement. Driving her Buick LeSabre back and forth to various volunteer jobs cost her $178 last month, she told him.
Franks was about to tell her what the legislature was planning to do, but Zahn already knew.
“They should do it,” she cut in. “I emphatically believe that. It should have been done a long time ago.”
Franks agreed.
“I get more phone calls, more e-mails on this than on any other issue,” he said later. “It’s affecting them in the wallet. It’s a big issue. We have to do something about it.”
Rep. Bill O’Connor (R-Riverside) encountered a similar scene at a recent coffee klatsch in his west suburban district, where senior citizens were up in arms about gas prices.
“It’s horrible,” Mary Panico, a Brookfield resident who says she is disgusted by the prices. “It’s like paying a second mortgage.”
Fortunately for O’Connor, he had an answer the group liked.
“We’re going to do what we can,” he said. “If we cut the state gas sales tax, it’s not only going to take 10 to 12 cents a gallon off prices,” but will also send a message of outrage to those responsible.
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At a time when every House seat and a third of those in the Senate are up for election, the repeal will be a boon to incumbents. Challengers like Salvi and John Lamantia, the Democrat running against O’Connor, can only talk about it.