Illinois Suspends Gas Tax to Cut Costs

Driven by election-year outrage over some of the highest gasoline prices in the nation, Illinois on Thursday became the second state to suspend its sales tax on gas.

Legislators urged gas stations to pass along the 5% tax savings on the gasoline they sell. If they do, drivers could see prices fall by seven or eight cents a gallon in a state where prices in some areas have soared above $2 per gallon.

The legislation, which was signed by Gov. George Ryan, suspends the tax for six months, starting Saturday, and requires each gas pump to display a sign saying the tax has been lowered and that prices should reflect the change. The suspension is expected to cost the state $180 million, to be made up in part with state agencies trimming their budgets by 2%.

Illinois’ special session followed neighboring Indiana, where Gov. Frank L. O’Bannon last week signed an order suspending that state’s sales tax on gasoline for 60 days.

Politicians in other Midwestern states have discussed similar actions.

Wisconsin legislators sued the Environmental Protection Agency on Thursday over clean air regulations that they blame for high gas prices in southern Wisconsin.