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Sweeps can have consequences

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Illinois

A $20.3 million payment backlog for cleaning up leaky underground petroleum tanks in Illinois could cost the state federal approval of the program.

Payment delays have left some individual contractors with millions of dollars in unpaid bills for cleanups at 709 storage tank sites statewide, according to figures from the Illinois Environmental Protection Agency.

The Illinois Comptroller’s Office has no authority to pay contractor claims submitted by the state EPA as a result of a state budget impasse that’s now into its 10th month.

As a result, the U.S. EPA is threatening to cancel its approval of the Illinois program, which would force site owners to purchase private insurance or find other ways to pay for future cleanups while the budget impasse drags on. […]

In a March 21 letter to Illinois EPA Director Lisa Bonnett that was obtained by The State Journal-Register, the U.S. EPA also expresses concern that an estimated $20 million from an “underground storage tank” fund was used for non-cleanup purposes in 2015. The Illinois program, funded through a 1.1 cents-per-gallon tax on fuel, has paid out more than $800 million since it was create in 1989, according to state EPA figures.

Notice how there’s a $20.3 million payment backlog and how the state used $20 million from the fund last year for “non-cleanup purposes”?

Well, the state swept $20 million from the LUST fund and deposited the money into the General Revenue Fund as part of the Fiscal Year 2015 budget fix last May. The funds which were swept supposedly all had excess cash in them.

Oops.

…Adding… I’m told by the governor’s office that the fund’s “balance [currently] exceeds $53 million while current claims waiting for appropriation authority total under $20 million.”

OK, fine, but the EPA is still upset about that sweep.

posted by Rich Miller
Friday, Apr 8, 16 @ 9:42 am

Comments

Act 2, Scene3 from The Gang That Could Shoot Straight.

I can only image what Donald Westlake would have done with the raw material here in Illinois.

Comment by RNUG Friday, Apr 8, 16 @ 9:50 am
Couldn’t … darn phone auto-correct

Comment by RNUG Friday, Apr 8, 16 @ 9:50 am
Sweeps seem to be, at best, very temporary solutions so that we can continue to kick the can down the road. But as the LUST examples shows, sweeps aren’t even very good temporary solutions.

Comment by Joe M Friday, Apr 8, 16 @ 9:53 am
We can either sweep these funds or worry about the EPA after, if need be.

Health might suffer because of the sweeps?

Ok…

Comment by Oswego Willy Friday, Apr 8, 16 @ 9:54 am
–Notice how there’s a $20.3 million payment backlog and the state used $20 million from the fund for “non-cleanup purposes”?–

What a coincidence. And more Illinois contractors not paid the money they’re owed for services rendered in good faith. Pro-business.

More sweeps to come, as Sen. Radogno and Rep. Durkin proposed yesterday.

Ten months into this mess, and the “big idea” for social services is $860 million in sweeps and another $434 million bump in the GRF deficit. To be paid back in good old phantom “pension reform savings.”

How creative. Really shakin’ things up.

Comment by wordslinger Friday, Apr 8, 16 @ 9:54 am
Word + 1

Comment by Norseman Friday, Apr 8, 16 @ 10:02 am
I’ve never understood - or agreed - with the alleged legality of fund sweeps, no matter which party or administration is doing it. Most special funds are paid for by fees that are supposed to be related to the cost of providing the ’service’ that the fee applies to. If it’s in excess of the reasonable allocated cost to providing that service (issuing a license, providing for inspections, oversight of the regulated activity, etc.) then it’s not a fee, it’s a tax. And sweeping special funds into the general fund then amounts to nothing more than a back-door tax increase on the backs of those who used whatever particular service or engaged in whatever regulated activity, is relevant. Sigh. Friday morning rant complete.

Comment by Team America Friday, Apr 8, 16 @ 10:02 am
== Ten months into this mess, and the “big idea” for social services is $860 million in sweeps and another $434 million bump in the GRF deficit. To be paid back in good old phantom “pension reform savings.” ==

And yet there is supposed to be $780M in initial pension savings, but only $434M is GRF. How do they figure that? What funds have the other $246M?

Comment by RNUG Friday, Apr 8, 16 @ 10:03 am
I’m sure there are no problems with petro tanks in Winnetkastan!

Comment by Jack Stephens Friday, Apr 8, 16 @ 10:10 am
The funds did not necessarily all have “excess” cash in them. Just because a fund has a balance does not mean the fund has “excess” cash. In our particular case most of the money in one of our special funds comes in once a year. So, depending on when you look at it, it might seem like a significant balance is available. Problem is, those funds have to last a year. People should understand what they are sweeping before they do it. You may solve one problem and create another if you don’t understand what you are doing. Unfortunately, when it comes to special funds I’ve found a lot of people don’t understand what they are doing.

Comment by Demoralized Friday, Apr 8, 16 @ 10:11 am
I’m ok with sweeps. If the revenue from fees related to the service provided ends up being higher than the costs, sweep away, I say. Helps balance the budget.

But this action was a shell game. Sweep money that is owed, and cause extra costs to businesses while we’re at it.

Waste, fraud, and mismanagement is a symptom of not raising taxes.

Comment by Robert the Bruce Friday, Apr 8, 16 @ 10:12 am
Rauner’s “rob Peter to pay Paul” budget. What happens to the service Peter was providing - or what happens when Peter runs out of money?

Comment by Joe M Friday, Apr 8, 16 @ 10:14 am
Heard this on the radio this morning. The story went on to say that they have $58 million in the account, more than enough to cover the outstanding debt.

On a side note, this LUST fund is funded by our purchase of gasoline at a rate of $0.011 per gallon.

Comment by Huh? Friday, Apr 8, 16 @ 10:15 am
It’s tempting to sweep special funds but historically there has not been nearly enough research on the individual impacts. These are not pots of cash just sitting around for you to play with, people.

Comment by Politix Friday, Apr 8, 16 @ 10:20 am
Sweeping funds just passes the budget problem on to someone else. Last year MFT was swept for 50 million. It was not a surplus but designated to local agencies.They had to reduce road maintenance. Look for this to happen again.

Comment by pool boy Friday, Apr 8, 16 @ 10:20 am
Maybe Bruce and Diana can skip their Holiday trip this year and make a donation to cover this. /s

Comment by cdog Friday, Apr 8, 16 @ 10:21 am
The backlog is because of lack of appropriation, like many other backlogs.
There is $58 million in the fund.

So, they have a backlog of $20 million, with $58 million in the fund.

Doesn’t have anything to do with the sweep.

Comment by C'mon Man Friday, Apr 8, 16 @ 10:24 am
The problem with the LUST fund sweep, regardless of the current balance is that there is federal $$ mixed into the total.

The Feds do not allow ‘fund sweeps’ for this exact reason. It is possible for example that some of those co-mingled federal $$ is now being used for an expenditure that the Fed’s didn’t give money for.

The Feds gave $$ for LUST cleanup. Not to cleanup Rauners funding debacles. That’s the problem.

It doesn’t matter if we had $100M in the fund. The point is that some of the $20M used already in a sweep undoubtedly contained federal funds. Even if it were only $1, it can’t happen, period.

And Rauner can’t prove that none of the $20 already swept isn’t from the federal $$.

Hence the dustup. Easily preventable, but the ’superstarz’ don’t understand it, and more importantly - don’t care.

Comment by How Ironic Friday, Apr 8, 16 @ 10:29 am
As an aside, what sort of daydreaming was going on with the person who came up with LUST fund acronym?

Comment by wordslinger Friday, Apr 8, 16 @ 10:37 am
–I’m told by the governor’s office that the fund’s “balance [currently] exceeds $53 million while current claims waiting for appropriation authority total under $20 million.”–

So those contractors who haven’t been paid for the work they did are just more hostages, thanks to the governor’s refusal to use his line-item or reduction vetoes.

Glad the superstars could clear that up.

Comment by wordslinger Friday, Apr 8, 16 @ 10:41 am
RNUG 10:03 +1

Perhaps these gas tax fund sweeps should have been considered more earlier in the week when there was a proposal to increase fuel tax because there is not enough money. Use the tax dollars as intended, show your proof of it, then ask for more.

Comment by Gobblers Knob Friday, Apr 8, 16 @ 10:42 am
The LUST fund has been a stepchild since the days of Blago. There are several companies that have gone tango uniform over the last decade that dealt with cleaning up these storage tanks because of delays of payment by the state. The sweeps have been job killers and the Speaker has refused GOP legislators’ attempts to protect the fund from sweeps. As per usual, there’s plenty of blame to go around.

Comment by hot chocolate Friday, Apr 8, 16 @ 11:09 am
Team America hit it on the head. I also question their legality and I don’t believe it’s an honest and transparent way to run state government regardless of who is the Governor.

Comment by Regnad Kcin Friday, Apr 8, 16 @ 11:20 am
(Snark Alert)

From the ILGOP, hot off the presses! A new childrens’ book about how best to run Illinois Government-

“What Happens When You Give a Governor a Broom?”

Comment by Anon221 Friday, Apr 8, 16 @ 11:29 am
Illinois’ special funds are insane. No other state has anywhere close to the number of special funds that we do. It isn’t hard to keep the federal funds separate from the state dollars. The real problem is THE LACK OF A BUDGET THAT PROVIDES SPENDING AUTHORITY TO PAY THESE PEOPLE. arrgh.

Comment by Soccermom Friday, Apr 8, 16 @ 11:31 am
What are we going to do when we run out of quarters from the sofa cushions?

Comment by NoGifts Friday, Apr 8, 16 @ 11:33 am
Soccermom - “Illinois’ special funds are insane. No other state has anywhere close to the number of special funds that we do. It isn’t hard to keep the federal funds separate from the state dollars.”

****
Many of these special funds were set up to SPECIFICALLY PROTECT monies that were to be used ONLY for certain programs so they could not be swept- ever. Some have to have a combination of federal and state (and sometimes private) monies in order to be administered. I would point some of these out, but it appears that the Comptroller’s website has had a MAJOR overhaul, and I haven’t been able to find the Special Funds and their descriptions on it. So much for transparency! The old site is coming up as a 404 error-

http://ledger.illinoiscomptroller.com/Ledger/?LinkServID=A72F6F8F-5056-9397-F02AE48ED06E6CD3&cbfund=0918&CFID=1816647&CFTOKEN=667e66b9b997c99e-A56B4241-5056-93B5-5ED516AAA38A4927

Comment by Anon221 Friday, Apr 8, 16 @ 11:47 am
=== Illinois’ special funds are insane. ===

The growth of special funds stems from the systemic underfunding of state services. When there is not enough money to maintain existing services, the only way to expand those services was to create a special fee/tax to fund the expansion. All the special fund related bills I worked on related to fees agreed to by regulated groups to ensure funding for programs they and our agency agreed were needed.

Comment by Norseman Friday, Apr 8, 16 @ 11:49 am
The fund has a balance over double the claims against it and equal to 6.6% of what its spent over 27 years, even after a $20million sweep??? Goodness.

Not sure the sweep is the real story here, especially considering the road funding issues Illinois has.

Comment by SES Friday, Apr 8, 16 @ 11:50 am
Anon 221 — I do, in fact, understand the purposes of the special funds. The issue (apart from the lack of a legal spending authority) is that these funds represent a huge chunk of Illinois’ operating budget, and that they are often over-funded (in relation to likely need) and focused on important but second-tier concerns while other vital programs are starved. That’s just bad fiscal policy — one of the many that have evolved in response to our ongoing inability to person up and increase revenues to meet our needs.

Comment by Soccermom Friday, Apr 8, 16 @ 11:59 am
This fund was also swept in fiscal years 2003 (Ryan) and 2004 (Blago) - did the feds complain about those? Or is their concern really about the state’s failure to make payments this year?

Comment by cover Friday, Apr 8, 16 @ 12:06 pm
Soccermom- Before any sweeping, I would like to see from both the Governor and the Legislators who are proposing these sweeps, exactly which funds and how much, and if that sweep will ever be repaid or not. They need to justify this with actual numbers. In the bill that Durkin and Radogno submitted yesterday, the Tobacco Settlement Fund was the “winner” to be tapped for social service appropriations. That might be OK, and maybe it doesn’t need to be paid back. However, the LUST fund for the gas tanks DOES need the money, and there may be Federal consequences on that one.

Let the People of Illinois see what may be swept. Let them have a voice in deciding if a fund is needed or not, and IF it is over-funded or needs to be absorbed elsewhere or dissolved. Don’t just hand Rauner the broom.

Comment by Anon221 Friday, Apr 8, 16 @ 12:13 pm
cover- Was it paid back in full later?

Comment by Anon221 Friday, Apr 8, 16 @ 12:13 pm
I bought an old abandoned gas station in 2000, paid the $15,000 deductible and the tanks were pulled in 2001. Sweeps have caused two contractors to go bankrupt, and now I’m worried about the third. I sold the property in 2003 (who built a car wash on it) but yet….FIFTEEN years later it is still not declared free of contamination. The current owner can’t sell it until he gets an NFR letter, and I’m still on the hook for the cleanup. Can the “pro-business” governor explain how this helps?

Comment by Vote Quimby! Friday, Apr 8, 16 @ 12:32 pm
===what sort of daydreaming was going on with the person who came up with LUST fund acronym===

Just be happy they didn’t settle on Storage Leak Underground Trust Fund instead.

Comment by 47th Ward Friday, Apr 8, 16 @ 12:36 pm
==Health might suffer because of the sweeps? Ok…==

The point of the LUST fund is to remove petroleum-contaminated soil from potential water sources.

Comment by Vote Quimby! Friday, Apr 8, 16 @ 12:41 pm
VC, there are three vacant lots on Madison Street in my neighborhood with the same problems. Prime real estate, too.

The old gas station owners went bust and nobody wants to poke a hole in the ground because they’re afraid they’ll be on the hook for what they might find.

Comment by wordslinger Friday, Apr 8, 16 @ 12:46 pm
People don’t care if gas tanks leak as long as it isn’t in their backyard. Hello… this is about water and soil pollution, & the EPA fund is there to help keep our water and soil from being unhealthy!

Comment by Mama Friday, Apr 8, 16 @ 12:53 pm
Word,
Exactly. They should be afraid…very afraid. I never operated a gas station… Just bought it after it had closed and assumed the risk. No one sane wants that liability, and in the meantime the pollution spreads. And the lots sit empty…

Comment by Vote Quimby! Friday, Apr 8, 16 @ 12:55 pm
wordslinger - @ 12:46 pm: they might find your water is being polluted. Can the city check it out to make sure the city’s drinking water isn’t being contaminated?

Comment by Mama Friday, Apr 8, 16 @ 1:08 pm
Those contractors the state owes should be paid before any money is swept from the fund.

Comment by Mama Friday, Apr 8, 16 @ 1:09 pm
@wordslinger–Not only are the companies that do the tank removals hostages, but now some of them are on the unemployment line.
I know of at least one company that had to shut it’s doors and lay off employees because they were owed money from the fund.
How’s that for supporting small business in Illinois?

Comment by Annoyed Friday, Apr 8, 16 @ 2:00 pm
Q. If the Illinois EPA knew they had $20 million in unpaid bills, why wasn’t this included in the non-GRF appropriations bill?

A. The administration hopes to sweep the fund again.

Comment by Yellow Dog Democrat Friday, Apr 8, 16 @ 4:28 pm