by Mark Reddig
Truckers in Illinois are reeling after being notified they must pay additional fees — some more than $1,000 — to keep the plates they already paid for this year.
The additional money — called a Commercial Distribution Fee — was passed earlier this year as part of Senate Bill 841. The law requires every owner of a truck over 8,000 pounds to pay a fee equal to 36 percent of his or her Illinois registration fee every year.
But many truckers were caught off guard when they received letters around Oct. 1 saying they owed the fee this year, even though they already have valid plates.
All truckers eventually pay
Although only in-state truckers are being charged now, the new fee applies to all truckers who travel in Illinois, officials at the Secretary of State’s Office said. Like other registration fees, it is apportioned based on the percentage of a trucker’s total miles traveled in the state.
The apportionment is handled by the International Registration Plan, or IRP, a reciprocal interstate compact that regulates payment of fees to states by truckers.
Beth Kauffman, spokeswoman for the Secretary of State, said the recent bills were sent to in-state truckers who have flat weight or mileage-tax based plates.
According to the letter, truckers who receive the bills must pay the fee by Nov. 1. Not paying “may result in revocation or suspension of your vehicle registration.”
However, Don Kerber, legislative liaison for the Vehicle Services Department of the Secretary of State’s Office, says that does not apply to any truck owner who has IRP plates. They should not receive a bill now.
“The law was not even effective when their registration year began,” Kerber said.
IRP plates are purchased for 12 months beginning April 1, while the year for in-state plates begins July 1 — the effective date of the bill. That’s why in-state truckers must pay the fee now.
IRP-plated truckers “should not be getting a bill for anything they renewed in April,” Kerber said. “The only thing they are being billed for is any changes they made to their fleet after July 1.”
What Illinois wants you to pay
Cathy Koncilia of OOIDA’s Business Services division said the registration fee for an 80,000-pound truck that runs all of its miles in Illinois was $2,790 last year. The new Commercial Distribution Fee would add $1,005 to that figure, bringing the total fees paid to the state to $3,795.
Truckers who run only part of their miles in Illinois would pay less, based on the percentage of their total miles they run in the state.
The bill also contained a bonus for some trucking companies. The firms will receive a $50 tax credit for every truck driving Illinois resident they employ.
But that has not dulled the sharp reaction of truckers.
“I’m an owner-operator; I only have one truck,” OOIDA member and owner-operator Glen Sonntag, Marengo, IL, said. “I’m leased on with a company. To me, to give me a $50 tax credit for everyone I hire, it wouldn’t do me any good.”
Making the fee even harder to bear for some is the fact that it won’t be spent on highways or other issues important to truckers. The bill directs the money to the state’s general fund, where it will help solve Illinois’ running budget shortfall.
Victims of a budget crisis
Todd Spencer, executive vice president of OOIDA, said truckers are victims of a budget crisis that has swept virtually every state.
“The reality is ... budgets are squeezed,” he said. “State lawmakers are doing everything they can to find ways to bring revenue in.
“Truckers are certainly right to feel they’re being singled out for higher fees,” Spencer added. “While we may work in a very large industry, when it gets right down to it, when lawmakers want money, they’re going to get it somewhere, and most prefer to do it where they anger the fewest people.”
Spencer said the solution for truckers lies at the compensation end of the industry. That, he said, is where they must focus their efforts.
“While tax treatment, whether fair or unfair, is an economic burden, the challenge that all truckers have to focus on is finding ways to offset the cost,” he said, “finding ways to pass those costs along by setting a rate that will provide a reasonable return.”
The Business Services division at OOIDA has received several calls from truckers upset about the new fee.
Some truckers are upset about the size of the bill.
“It’s just getting to be so much in Illinois with all those additional fees that our governor’s putting on everything,” Sonntag said. “He’s basically hitting the trucks the hardest. According to him, they make the most money and they damage the roads the most.”
More common, Koncilia said, are questions about timing.
“They can’t understand how they can make them pay this going retroactive back to July 1,” she said. “They were under the impression ... this would take place upon renewal date.”
State officials say the fee is not retroactive, even though the letters arrived three months after the purchase date for in-state plates.
The governor signed the bill at the end of June, Kauffman said, so the Secretary of State was not able to react quickly enough to get the bills out by July 1.
“The governor signs a bill and then we have to react,” Kauffman said. “We couldn’t just react in one day. It took us that long to get everything up and running.”
An exodus from the Land of Lincoln?
Trucking industry officials predicted that if SB841 passed, it would cost the state jobs. And that seems to be happening.
The St. Louis Post-Dispatch reported Sept. 30 that a number of companies in Illinois were reacting to the new fees by moving their operations to neighboring Missouri. The address change for one company, Henderson Trucking Co. of Salem, IL, will cost the state 500 jobs and roughly $15 million in payroll.
Henderson faced $100,000 in additional fees.
Owner-operators are up in arms as well.
Koncilia said one trucker she spoke with was considering moving his operation to Wisconsin, while another was eyeing an Iowa address.
Sonntag may join them.
“I’ve already been talking to my wife about it,” he said. “My wife even says that when my daughter’s out of high school — she’s a senior — we can seriously think about doing that, because she’s getting tired of it also, with everything going up.”
This one’s not over yet
Some of the bill’s initial opponents are still intent on stopping the new fee. The controversy that arose since bills began arriving has emboldened them to move ahead.
“The more you examine it, the worse it looks,” Sen. John Sullivan, D-Rushville, told The Herald-Whig. “It was a close vote when it passed last spring.”
The bill passed 32-16 in the Senate and 62-54 in the House.
“We’re sure going to try to get it overturned,” he added, “now that people see how bad this is.”
—by Mark H. Reddig, associate editor
Mark Reddig can be reached at firstname.lastname@example.org.