Republican governor hopeful Kirk Dillard on Monday rolled out a plan to reduce the state gas tax and borrow money to repair roads and bridges, but the candidate was unable to offer much in the way of specifics and contradicted himself on exactly what he was proposing.
The idea, which emerged after follow-up with Dillard’s campaign staff, is to reduce the state sales tax on gasoline from 5 percent to slightly more than 2 percent and use what money is left to back borrowing of up to $1 billion.
The proposal would put a hole of about $450 million in Illinois’ struggling state budget. Dillard maintained that his plan, “the first of many salvos over the tax policies of Illinois,” would make up for lost revenue through “growing the economy.”
Dillard, a state senator from Hinsdale who is making his second consecutive bid for the GOP nomination, struggled to explain how his plan would work during a sidewalk news conference in Lincoln Park.
Dillard interchangeably used terms such as “cut” and “rid” when discussing the gas tax.
“Illinois has two taxes on gas and I propose, using, getting rid of the second one — as I long have,” said Dillard, who noted the state also has a 19-cent per gallon tax on gasoline.
Later, Dillard said, “We need to get rid of the sales tax on gas. It’s 5 percent. It’s one of the reasons, and there’s many, why Illinois has the highest gas prices in the United States.”
Asked by reporters for details on his plan, such as the tax rate, Dillard said he would provide the information later. “Basically, it’s almost all gone,” he said of the sales tax. “It’s almost all wiped out.”
Dillard in the past has recommended shifting revenues from the sales tax on gasoline to replace the use of video poker money as a source for state bond-funded public works projects. On Monday, he said video poker was in Illinois to stay.
Dillard’s plan also would not affect the local government share of 1.25 percent in sales taxes levied on gasoline or the per-gallon taxes assessed by the state and some local governments.
Dillard’s proposal came before he and March 18 primary rivals Treasurer Dan Rutherford and state Sen. Bill Brady fielded questions from politically minded teens in the Mikva Challenge program in a forum taped for WTTW Ch. 11.
Asked whether a family should be able to live on the state’s $8.25 an hour minimum wage, Brady said it’s possible for a couple each working full-time.
“I think we have to realize there are people out there who are doing it,” said Brady, who later added, “It’s not going to be easy, but you can do it.” A full-time worker making Illinois’ minimum wage earns $17,600 a year.
Brady, Dillard and Rutherford oppose an increase in the state’s minimum wage, which is $1 an hour more than the federal rate of $7.25. Wealthy investor Bruce Rauner of Winnetka, who did not take part in the forum, has sought to conditionally tie any increase in the state or federal rate to pro-business reforms in Illinois.
Brady, the only GOP candidate for governor who supported a new law in December curbing state employee pension increases aimed at closing the state’s $100 billion unfunded liability, also said the measure’s passage would mean the scheduled reduction in the state’s income tax rate should go on as scheduled in January 2015.
“It will save us at least $1 billion or $1.2 billion in the first year, which lets the income tax go away,” Brady said.
The state's personal income tax rate is scheduled to fall from 5 percent to 3.75 percent, and the corporate rate is supposed to drop to 5.25 percent from 7 percent in 2015. But the loss of revenue is estimated by Democratic Senate President John Cullerton at about $5.4 billion.
Dillard and Rauner agree with Brady that the tax hike, approved in January 2011, should largely sunset. Rutherford, the first term state treasurer, said, “I don’t want it to stay.” But, he said, the pension changes could be found unconstitutional and “there may need to be a discussion of revenue on the table.”
A generation gap was on display. Asked by the teens what TV show or character inspired them, Brady cited “Bonanza,” which stopped airing first-run shows in 1973. Rutherford said “Sea Hunt,” which ran first-run episodes until 1961. Dillard kissed up to the hosts, listing Ch. 11’s “Chicago Tonight.”
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