Illinois' gas tax, fourth-highest in nation, enters gubernatorial debate

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SPRINGFIELD - Illinois' lucrative gasoline tax, the fourth-highest in the United States, is an issue in the governor's race.

Judy Baar Topinka, the Republican candidate, wants to temporarily suspend the tax, thus lowering prices at the pump.

The administration of Democratic Gov. Rod Blagojevich is not embracing an idea that would siphon revenue at a time when every dollar is needed to balance next year's state budget. The more gasoline costs, the more Illinois raises revenue because it levies a sales tax.

The tax is a big-ticket item for Illinois' treasury. The state raised more than $1.3 billion from motor fuel in 2005, so lifting the tax for a few months could cost the state hundreds of millions of dollars.

Even so, Topinka, the state treasurer, says the government must take action.

"The gas prices are just absolutely hideous," she said this week. "I've seen newscasts where people are pawning jewelry just so they can go to work, and we don't want to put people in that situation."

She lambasted Blagojevich for doing nothing to alleviate the situation.

Blagojevich has steered blame to President Bush.

"His policies have been all about looking after big Texas oil interests at the expense of consumers," Blagojevich said Wednesday. "What we're dealing with are issues from an administration that has pandered to Big Oil."

Blagojevich and Topinka face each other for governor on the Nov. 7 ballot.

In Illinois, drivers pay a 6.25 percent sales tax on gasoline - though that can vary by locality - and a 19-cents-a-gallon state tax and 18.4-cents-a-gallon federal tax. Depending on where they live, taxes total from 49 and 59 cents a gallon, according to the Illinois Department of Revenue.

Topinka says she favors lifting the state taxes on gas costing more than $2.50 per gallon, meaning that no matter how high prices go drivers would only pay taxes on gas up to $2.50 per gallon. Even if that idea doesn't go forward, she said, the state has to do something.

Also, state Rep. Bill Black, R-Danville, has introduced a bill that would suspend the state gas tax from May 15 until Sept. 15.

However, with Blagojevich's opposition, the measure's chances for success are slim in the Democrat-controlled legislature.

Blagojevich said this week he was "open to suggestions" for dealing with the high gas prices but hasn't offered his own proposal. State officials said he wants to finish the budget first before he considers lifting the sales tax.

Illinois last suspended its gas sales tax in 2000, under then-Gov. George Ryan, when the statewide average price for a gallon of gas was $1.89.

Lee News Service Writer Alexa Aguilar contributed to this story. Philip Ewing can be reached at philip.ewing@post-dispatch.com or 782-4912.

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