A Hidden Tax in the New Illinois Budget

Illinois residents have been watching closely as their lawmakers took the state to the brink of having its debt downgraded to junk status last month. It was a white-knuckle ride and there were no winners. But in the final compromise there was a hidden clause that made Illinois residents the undoubted losers of the final budget.

In 2011 Illinois granted ethanol a tax exemption, saving Illinois residents around 7 to 10 cents per gallon on their gasoline. The new budget quietly removed that exemption, and now gasoline wholesalers and consumers are crying foul. Cole Lauterbach writes at Watchdog.org:

Bill Fleischli, Executive Vice President of the Illinois Petroleum Marketers Association, said his members could stop using the E10 gas if straight fuel gets cheap enough.

“There will probably be a movement to bring straight gasoline back into the state,” he said. “If that happens, it will hurt the sale of ethanol, in turn, hurting farmers.”

But Patrick DeHaan, senior analyst with GasBuddy.com, said the wholesalers aren’t likely to drop ethanol since federal renewable fuel standard laws require a minimum amount of the corn-based combustible to be sold.

“I don’t really expect a shift at all,” he said. “Stations are still incentivized to sell ethanol.”

Fleischli disagrees, saying his members will ship straight gas in if it’s cheap enough. The fuel producer would simply buy ethanol credits to offset the federal penalty.

“Our members know the cost of every penny,” he said.

E.J. Smith - Your Survival Guy

Preparing your investments and family for when disaster strikes.

E.J. Smith is the Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention. E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com. Sign up here to receive all the best content from Richardcyoung.com each week.