Question of the day
Monday, May 25, 2015 - Posted by Rich Miller
* Finke…
When Gov. Bruce Rauner and state legislators were faced with filling a $1.6 billion hole in the state’s current budget, they turned to the same pot of money that’s been used in the past.
They decided a major part of the solution would be to take $1.3 billion out of the hundreds of special funds that are part of the state’s financial structure.
It was the first time Rauner used the technique of sweeping special state funds to help pay for other state operations. His office did not respond to questions about whether the governor might use the technique in the future.
However, Rauner did show a willingness to dip into special state funds again this spring to restore cuts made to human services programs known as the “Good Friday cuts.” The cuts later were restored when regular state revenues came in higher than expected.
* More Finke…
When lawmakers decided to sweep $1.3 billion from special state funds to plug a hole in this year’s state budget, funds that pay for road construction took a hit.
Three funds provided $350 million of the total. The state’s road fund was hit up for $250 million, the most taken from any fund.
“We are always opposed to diversions,” said Michael Sturino, president and CEO of the Illinois Road and Transportation Builders Association.
The Illinois Department of Transportation said the fund sweeps would not affect road projects in the current year. But as Sturino pointed out, the money is not going to be repaid to the funds which means that much less that will be available in the future.
* The Question: Your thoughts on fund sweeps? Take the poll and then explain your answer in comments, please.
surveys
- anonymous - Monday, May 25, 15 @ 2:30 pm:
In Soviet Russia the funds sweep YOU!
- walker - Monday, May 25, 15 @ 2:35 pm:
Only when critically necessary. This was necessary given the spot Rauner was in, and no extension of the tax rates.
To be fair, the Quinn/GA 2015 budget was technically considered “balanced” when it was passed, by an assumption of sweeps and borrowing. The tax increase revenue in calendar 2015 could not be legally counted at the time, regardless of what later happened.
- Norseman - Monday, May 25, 15 @ 2:42 pm:
Having negotiated several special fund bills, there was a commitment to the affected group that certain actions would occur in exchange for additional fees to cover the cost of those actions. If the fees are generating surpluses because of a miscalculation of costs or a failure of agencies to maintain program efforts, then the fees should be reduced. The purpose of the many of the special fund laws (I can’t speak with knowledge of all SFs) was not to provide for a surreptitious tax increase to be transferred to the general funds.
- kimocat - Monday, May 25, 15 @ 2:43 pm:
Only in the event of a “true” fiscal emergency. The taxes and fees that were enacted to fund these projects — such as through the Road Fund — were specifically designated for those needs. These “sweeps” just add to the distrust of government and general cynicism of the public. For example, why support a future gas tax increase for transportation projects if the Gov. can just say, “Hey that was then. Today I want to spend it on something else.”
- nona - Monday, May 25, 15 @ 2:49 pm:
Norseman is correct. Permanent sweeping is a breach of trust with the groups paying. These fees are taxes often paid by a small proportion of residents. The GOP would get it if hunter fees were swept.
- Emanuel Can't - Monday, May 25, 15 @ 2:53 pm:
Breach of trust. Special user fees were created for specific purposes. Changing the rules now is scamming those who agreed to the user fees in the first place. Never sweep ever.
- DuPage Dave - Monday, May 25, 15 @ 2:58 pm:
Road funds should be treated differently from most of the other special funds. Everybody uses the roads.
On the more specialized funds, a sweep every year or two would be a breach of trust or even fraud. In rare circumstances it should be allowable. The hard part is keeping sweeping from becoming a regular thing.
- Precinct Captain - Monday, May 25, 15 @ 3:00 pm:
I voted “If there is excess money, lower the fees or taxes which support those funds,” but I would add that if there is so much excess money in some funds, we may as well spend it. The road fund is one example. Another qualifier is that some special funds relating to the financial or insurance sector are used to cover potential bailouts or restructuring of bankrupt or distressed entities and those should not be raided.
- Casual Observer - Monday, May 25, 15 @ 3:10 pm:
Fund sweeps are the epitome of taxation without representation..
- Out Here In The Middle - Monday, May 25, 15 @ 3:27 pm:
Sweeping funds is a form of bait & switch. “Hey, we’re raising hunting & fishing fees to support conservation!” “Your licensing fees pay to regulate your profession!” “Gas taxes pay for highway construction!” Never mind, we need the money for something else.
- Pelonski - Monday, May 25, 15 @ 3:40 pm:
My answer, which isn’t one of the choices, is “it depends on the fund”. Funds setup based on special industry or organization taxes or fees (such as fishing licenses) should be left alone and used for their intended purpose. A large number of Illinois’ special funds, however, are carved out of the general taxes (occupation taxes, use taxes, income taxes, etc.). Diverting money from those funds should be fair game since they are essentially general revenue funds, anyway.
- Anonymous - Monday, May 25, 15 @ 4:32 pm:
There will be no incentive to save but max out the budget
- anon. - Monday, May 25, 15 @ 4:54 pm:
Pelonski has it exactly right.
- Kevin Highland - Monday, May 25, 15 @ 5:58 pm:
Don’t sweep ever, If there is too much money in a fund lower the fees/taxes on that fund. People pay fees & excise taxes expecting those monies to go toward supporting an activity.
The road fund was swept for $250M and a few short weeks later there was comments from the Gov’s office about raising the gasoline tax since gasoline prices were low and no one would really notice the increase. Fund Sweeping is wrong!
- Ugly Rumours - Monday, May 25, 15 @ 6:06 pm:
I’m with Norseman and the others who say that if there is a surplus, lower the taxes or fees. What I haven’t seen mentioned is that while this sweep may not affect current year projects, the loss of investment income on that money will affect the fund for years to come.
- DuPage Saint - Monday, May 25, 15 @ 6:17 pm:
How about dump all the money in one big pot where everyone can see it, know how much is there and how it is spent
- Slippin' Jimmy - Monday, May 25, 15 @ 6:34 pm:
I vote don’t sweep ever. Obviously for decades the state has failed to fund its pension funds. To sweep funds from line item A to pay for line item Z is the same principle it seems to me.
It is ultimately a failure of the GA/Governors for all those decades to properly pay for the state government they desired.
It is rapidly becoming uncontrollable as is their ability to manage it.
- Mongo - Monday, May 25, 15 @ 6:47 pm:
The whole point of the special funds is to carry out a state purpose. Doesn’t make any difference if it is barber licenses, open space, the road fund, occupational therapy licensing board, or affordable housing. That Illinois resident pays for that service and they should get it. They should not be deprived of it because the state has not made pension payments. And because the state allowed the income tax rate to drop (big mistake).
- Mongo - Monday, May 25, 15 @ 6:50 pm:
And sorry I voted don’t sweep ever. As you guessed.
- South of 64 - Monday, May 25, 15 @ 7:56 pm:
Many of these fees were established under Gov Edgar because he refused to raise the income tax but allowed fees to be charged knowing they would create surplus monies. I voted to sweep the funds because they were mostly a ruse to keep from raising taxes
- illinoised - Monday, May 25, 15 @ 8:30 pm:
I voted “no sweeping ever.” Sweeping does not work for personal finances nor government finances.
- Odysseus - Monday, May 25, 15 @ 10:39 pm:
My preferred option doesn’t exist in the poll. I would prefer to have vastly fewer special funds.
Fold these allocations into General Revenue.
- DHSJim - Tuesday, May 26, 15 @ 12:21 am:
…or raise taxes on those who can afford them. Namely millionaires and billionaires. Illinois’ gdp is $743 billion. Illinois is not broke.
- Harry - Tuesday, May 26, 15 @ 12:30 pm:
If there’s a persistent surplus, lower the fees, but don’t ever sweep. Fees are for specific purposes, taxes are for general purposes. If you want general funds, raise taxes, don’t charge unnecessary fees and lie about it.