Netflix and chill could soon be more expensive in Illinois under a proposal from the governor’s office to increase taxes on liquor, wine, beer and streaming media services, among other non-motor fuel tax increases.
To help pay for a $41.5 billion, six-year statewide infrastructure plan, the plan Gov. J.B. Pritzker's office put forward would not just double the state’s gas tax and nearly double vehicle registration fees for newer cars, but also increase the tax on beer, liquor and wine.
The proposal quickly drew fire opposition from alcohol industry trade groups and others.
Associated Beer Distributors of Illinois President Bob Myers said he was surprised by the proposed increase, which the organization opposes.
“Everybody just looks at the state tax, but if you take into consideration the city of Chicago tax, and the Cook County tax, those folks in that area are paying 61 cents per gallon for their beer, so you add another 4.6 cents per gallon and obviously everybody is paying more,” Myers said.
Myers said at 23.1 cents a gallon, Illinois already has the highest beer tax rate in the region. He said Wisconsin is at 6 cents a gallon, Iowa is at 19 cents per gallon, Missouri is at 6 cents, Indiana is at 11.5 cents a gallon and Kentucky is 8 cents a gallon.
“We’re already the highest in the area and all this is going to do is drive [consumers out of the state],” Myers said. “Illinois is losing bare minimum just for cross border sales $8 million. These are individuals that are going [to neighboring state] and they’re buying the beer, they’re buying their gas, they're buying their cigarettes, etc. And Illinois is losing all of that tax revenue.”
He also said it would be a regressive tax, which would affect lower-income people more.
“Joe Sixpack is obviously going to be paying more than anybody else,” Myers said.
The Wine and Spirits Distributors of Illinois is also opposed to the plan.
"Wine and Spirits Distributors of Illinois does not support yet another tax on wine and spirits," Executive Director Karin Lijana Matura said in a statement. "Particularly the huge increase on spirits. This tax provides more incentive for illegal sales of alcohol that already exists and creates further burden and cost for enforcement of regulated products. It is not about consumption it is about hurting the local retail businesses and in turn the distributor and its sales and labor in Illinois."
The proposed tax increases also include a 7 percent tax on streaming services. The Illinois Chamber of Commerce said, “this will be an unreliable foundation for funding because it will be complex, unpopular and possibly unconstitutional.”
State Sen. Martin Sandoval, D-Chicago, said Wednesday that lawmakers are considering all kinds of revenue to help pay for roads.
"You know, everything from beer, wine, spirits, video poker, ride-sharing, care sales, I think it's all on the table, and these are all ideas that have resurrected from many of my colleagues as possible revenue sources and we're looking at all of them to see the viability of it all," Sandoval said.
Outside of proposing to increase motor fuel taxes to 19 cents a gallon, and increased vehicle registration fees depending on the age of the vehicle, there would also be an electric vehicle registration fee of $250 per year. The governor’s proposal includes a $1 per ride tax on ridesharing services like Uber or Lyft and a parking garage tax of 6 percent.
Senate Minority Leader Bill Brady, R-Bloomington, said Republicans “who were part of the capital working group, received a briefing on the governor’s proposal."
"We look forward to these discussions continuing as we work toward a plan that addresses our state’s critical infrastructure needs and creates jobs,” Brady said.
Mark Denzler, president and CEO of the Illinois Manufacturers’ Association, called for further talks.
“Illinois’ infrastructure is crumbling, and we applaud Gov. JB Pritzker for his desire to invest in our roads and bridges, strengthen career and vocational education opportunities and further develop our rail, air and waterways,” he said in a statement. “Manufacturers share the goal of creating modern, updated infrastructure to better move people and products around the world. However, this must be achieved through responsible funding solutions. We look forward to working with the governor and lawmakers to help craft a balanced capital bill.”