Fleischli told The Illinois Business Journal that gas station operators had a very difficult 2008. When the price of gasoline shot past $4 per gallon, the [image-nocss] cost of a truckload of fuel went from about $8,000 to $32,000, stretching the abilities of the retailers to finance the purchase. At the same time, he said, the high price drove down demand, leaving retailers with higher costs and lower profits.
"If you make a dime on a gallon of gas, that's a good day," he said. "If the customer uses a credit card, you lose 3%. It depends on market conditions and competition, but I think the national average last year was between 8 and 10 cents a gallon profit."
Fleischli said the problem is compounded because declining demand for gasoline means declining sales on convenience items inside. The convenience store operator gets hit on both sides of his business. He said raising the motor fuel tax 42% is not only the wrong thing to do in these economic times, but is also not warranted. "The first thing that we should do is find out how much money actually goes into the road funds, and if it has all been spent on roads. I believe some of these funds have been spent and some of these funds have been diverted to other uses. All of that should be paid back before we try to tax the people more during a recession."
He added that Illinois residents already suffer with higher gasoline prices than their neighbors because Illinois is one of only about 10 states in the country that levies a sales tax on gasoline.
"In 1993, the bridge over the Mississippi River at Quincy was closed because of the flood," Fleischli said. "When they shut the bridge down, people couldn't go across the river to buy their fuel and gasoline sales volumes went up 120% in the Quincy area. Even 50 miles away from the river the volumes went up 50% to 60%. That showed us that people had a plan; they would go across the river to buy their fuel in Missouri and then come back to the Illinois side."
According to Fleischli, the two largest gasoline stations in the country are on the Chicago Skyway just across the state line in Indiana. He told the newspaper that those stations do the most inside sales, the most lottery sales and have the highest volumes of gasoline sales of any stations in the nation. He attributed it to drivers focusing on buying their fuel outside of the state of Illinois.
Fleischli said the politicians are talking about creating more jobs, but that raising taxes in the middle of a recession is a horrible idea. "If they want to do something for the citizens, they ought to take the sales tax off gasoline. It's as necessary a product as prescription drugs and food are in my estimation. People have to use gasoline to get to work, do their jobs and take care of their children. That's the reason they took [the sales tax] off prescription drugs and food, and I think what they ought to do is take the sales tax off gasoline. It would save the consumers a lot of money."
"We have a lot of needs in the state," Bradley told the paper. "There are bridges that are in need of repair; we have real safety concerns. And then there's the fact that this could potentially create jobs in tough economic times. The creation of jobs and building programs is a way to dig out of this recession and depression."
Bradley estimated that the 8-cent increase would generate somewhere between $500 million and $600 million per year. This revenue stream, he said, would support about $6 billion in bonded debt. He said the previously proposed $34 billion capital development program, which would have been financed through leasing the lottery and major expansion of gambling in the state, has been discarded. He said leasing the lottery proved to be unconstitutional and gambling has taken a big hit lately, with 2008 revenues down about 21% from 2007. "One of the things that has gotten us into trouble in the state of Illinois in the past are these huge capital programs that we have to pay for for years," Bradley said. "My focus has been on trying to come up with a more stable program that meets our needs at a consistent level over time."
While Bradley said he is not wild about the idea of raising taxes, the state needs the money to repair its roads and bridges, and the question that needs to be focused upon is what is the fairest way to raise those funds. "I don't expect people to embrace the idea of paying an additional surcharge," Bradley said. "I don't like it any more than anybody else does. What I want people to do is that they need to think through these issues and try to think in terms of what our needs are and how we pay for our needs, and how we get to where we need to be with the least amount of pain for the state of Illinois and for the people of Illinois."
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