Planning a July 4th road trip? Here’s why you may want to fill up before then.
When the calendar turns to July, Illinois residents may be faced with a doubling of the state’s gasoline tax, along with tougher penalties for texting while driving, raising the age limit to 21 to buy tobacco, and possibly higher taxes on cigarettes.
Several changes for Illinoisans are coming on July 1 thanks to legislation passed by the General Assembly this year and last year. Among them, the state gas tax will go from 19 cents to 38 cents per gallon once Gov. J.B. Pritzker signs the legislation, which he is expected to do. The effective date of July 1 was written into the legislation.
Penalties for texting while driving are set to become tougher under legislation signed by former Gov. Bruce Rauner in 2018.
Starting July 1, a first conviction of using a hand-held electronic device while driving, such as texting while driving, will be considered a “moving violation,” as opposed to a “non-moving violation.”
Three moving violations in the course of a year would lead to a driver’s license suspension, for a minimum of 30 days, said Henry Haupt, a spokesman for the Secretary of State’s Office.
Under the previous law, second and subsequent violations for texting while driving offenses are treated as moving violations, while first offenses are treated as nonmoving infraction.
“With the increased use of technological devices, distracted driving has become a serious problem on the roads of our state and throughout the nation,” said Secretary of State Jesse White. “This important law will make our roads safer. No driver should be texting while driving.”
The Secretary of State’s office added texting while driving is considered among the most deadly forms of distracted driving.
According to the National Highway Traffic Safety Administration, a motorist traveling at 55 mph takes their eyes off the road on average for five seconds to send or read a text. This would equate to driving blindly for the length of a football field.
Gas tax to double
As part of the six-year $45 billion Rebuild Illinois capital bill package passed by the General Assembly, two sets of taxes are set to increase on July 1.
One is an increase in the gas tax. Legislators voted to increase the gas tax from 19 cents per gallon to 38 cents per gallon, and peg it to inflation. The state’s gas tax has been 19 cents per gallon since 1990. Illinois also charges a sales tax on motor fuel purchases.
By comparison, Missouri’s gas tax is 17 cents per gallon, and does not add on a sales tax on motor fuel sales. Pennsylvania has the highest state gas tax at 58.7 cents per gallon.
Pegging Illinois’ motor fuel tax to inflation is meant to keep lawmakers from needing to vote to increase the motor fuel tax again.
An additional tax on diesel fuel is set to increase as well from 2.5 cents per gallon to 7.5 cents per gallon.
The gas tax increase would help pay for road, bridge and transit construction projects in the capital spending plan.
When presenting the gas tax, which did receive bipartisan support, state Rep. Jay Hoffman, D-Swansea, said it was backed by business, labor unions, contractors and transit officials. Statewide, drivers are spending billions of dollars to deal with flat tires, wear and tear on vehicles, and burning fuel while sitting in traffic because of poor road conditions, Hoffman said.
“We here … are talking about building a stronger Illinois,” Hoffman said on the House floor earlier this month.
“I don’t care if you live in the south, southwest part of our state, central or northern part of our state, there is something in here that’s going to help you and help your constituents and put people to work,” Hoffman added.
However, not everyone was in favor of the gas tax increase. State Rep. Blaine Wilhour, R-Beecher City, was among those to vote against the gas tax increase.
“We already have the highest combined state and local taxes in the nation and leaders in the House and Senate just raised taxes again,” Wilhour said in a news release. “Families in our region are going to be hurt by these tax increases especially the gas tax increase. This is a regressive tax that is going to be painful rural residents.”
The legislation still has one hurdle to clear. It needs to be signed by Gov. J.B. Pritzker. However, when details of a capital plan proposal from Pritzker’s office were released, it included doubling the motor fuel tax as one of the revenue sources.
When the legislation for the capital bill will be signed is still being determined, said Jordan Abudayyeh, the governor’s press secretary.
Buying cigarettes will cost more
A pack of cigarettes is set to become more expensive on July 1 as well.
In order to help pay for the capital bill, legislators passed a $1 per pack increase to the cigarette tax, bringing the tax to $2.98 per pack.
The increase was part of the legislation that included the large gaming expansion in the state and also still needs to be signed by Pritzker.
Pritzker had initially proposed a 32-cent-per-pack increase, but Senate President John Cullerton pushed for an even greater increase.
“It’s rare that you can sponsor legislation and know that it will save lives. That’s exactly what this will do,” Cullerton said in a news release when the $1 increase was proposed. “It will stop children from starting to smoke and cause many adult smokers to quit, sparing them from a lifetime of addiction and associated health problems. That’s why the public supports it.”
Sales of electronic cigarettes also will be taxed at 15 percent under the same legislation.
The governor still needs to formally sign the legislation.
Gas tax and cigarette tax increases were among the revenue sources passed to help pay for the state’s capital plan.
Also going into effect on July 1 is Illinois’ Tobacco 21 law, which requires people to be at least 21 years old in order to buy tobacco or e-cigarette products. Rauner vetoed the legislation last year, but legislators decided to bring it back. The law was signed in April by Pritzker.
Gaming increases
As part of the gaming expansion, the tax on video gaming terminal income is expected to increase to 33% starting on July 1, up from the current 30%. On July 1, 2020, the net terminal income will be taxed at 34%.
Video gaming terminals are allowed at restaurants, taverns, fraternal organizations and truck stops, and were legalized as part of the state’s previous capital bill. The state taxes the net terminal income off the top, and video game operators and the local businesses hosting the terminals then split the remaining amount in half.
The proposed higher tax on net video gaming terminal income is still different than what Pritzker had initially called for: a 50 percent tax net terminal income higher than $2.5 million. But that met resistance from businesses with the video gaming terminals and terminal operators.
However, the gaming expansion does include provision that allows the maximum bet at video gaming terminals to increase to $4 from $2. The maximum prize limit increases to $1,199 from $500 on a single maximum wager.
Taverns, restaurants and fraternal organizations will be able to have six machines, up from five machines. Truck stops will be able to have up to 10 video gaming terminals.
The gaming expansion and cigarette tax increase are part of the same bill that received bipartisan support. Pritzker has not yet signed the legislation but is expected to sign it.
Other July 1 taxes
As part of the gaming expansion legislation, legislators included an increase in the tax for transferring real estate from 50 cents for every $500 of property value to $1.50 for every $500 of property value.
As part of the state’s operating budget, which was signed by Pritzker, the state will now have an assessment on insurance providers that operate as Medicaid managed care organizations.
This will help Illinois pay more money into Medicaid, and in turn bring back more federal reimbursement dollars for Medicaid patients to the state, NPR Illinois reported.
How metro-east legislators voted
Gaming expansion/cigarette tax
State Rep. Monica Bristow, D-Godfrey: No
State Rep. LaToya Greenwood, D-East St. Louis: Yes
State Rep. Jay Hoffman, D-Swansea: Yes
State Rep. Charlie Meier, R-Okawville: Yes
State Rep. Nathan Reitz, D-Steeleville: Yes
State Rep. Katie Stuart, D-Edwardsville: Yes
State Rep. Blaine Wilhour, R-Beecher City: No
State Sen. Christopher Belt, D-Cahokia: Yes
State Sen. Rachelle Aud Crowe, D-Glen Carbon: Yes
State Sen. Jason Plummer, R-Edwardsville: No
State Sen. Paul Schimpf, R-Waterloo: No
Gas Tax increase
Bristow: No
Greenwood: Yes
Hoffman: Yes
Meier: Yes
Reitz: No
Stuart: No
Wilhour: No
Belt: Yes
Crowe: No
Plummer: No
Schimpf: No
This story was originally published June 21, 2019 at 12:21 PM.
