Illinois governor offers fuel price break - for an airline

| 7/31/2006

Gov. Rod Blagojevich has promised to give an Illinois-based airline some relief from high fuel prices. Meanwhile, millions of drivers in the state paying more than $3 per gallon for diesel and gasoline are left holding their fuel pumps.

To keep United Airlines from packing up and moving its headquarters out of state, the governor has pledged to work with state lawmakers to create an incentive package that would include a reduction in the sales tax charged to the air carrier when it fills the tanks on its planes, The Quad-City Times reported.

The announcement comes as the Democratic governor and party leaders have turned back similar proposals to reduce the amount of sales taxes the state charges truckers and other drivers when they fuel up.

The potential perk for United Airlines could come up for a vote when state legislators return to the capitol after the November election, The Times reported. If approved, it would be the second time in as many years that Blagojevich has given a large company a break on fuel taxes while offering truckers and other drivers nothing.

In August 2005, United Parcel Service was the beneficiary of a law that allows the company to save up to $100,000 annually on fuel charges, the newspaper reported.

The incentive package for the air carrier was announced after the company dropped its threat to leave the state and instead move into downtown Chicago. In addition to tax breaks from the city and the proposed fuel tax break, taxpayers in the state will chip in another $1.35 million in grants and assistance to the company, The Times reported.

Since fuel prices began their rise to current levels, state government reportedly has received about $140 million in unexpected revenue during the past fiscal year.

With that in mind, Republican gubernatorial candidate Judy Baar Topinka is calling for a fuel tax holiday to provide some relief from pump prices. Blagojevich has given no indication he would support such a proposal.

– By Keith Goble, state legislative editor