Illinois could tap $4B worth of special funds in budget mess
SPRINGFIELD, Ill. -- Half a year into its deepening budget crisis, the state of Illinois is sitting on at least $4 billion in cash.
An Associated Press analysis of state records finds the money in 531 separate accounts set up for special - and specific - purposes, but precedent shows that lawmakers and governors in less anxious times have dipped into those accounts to pay regular state expenses and stave off financial distress.
Two weeks ago, Democratic lawmakers agreed with Republican Gov. Bruce Rauner on tapping a total of $3 billion from 112 of the special state funds - albeit to finance those funds' intended purposes. The short-term spending plan sent more than $1 billion owed to cities and counties in tax revenue from income, fuel, gambling and more, as well as providing $400 million to keep state agencies operating and paying other bills.
Debate on the plan resurrected the often-pejorative term "fund sweeps" among Capitol chatter. It's a practice of taking money for one purpose to pay for something else which gained notoriety during the tenure of former Democratic Gov. Rod Blagojevich, who took office in 2003 amid budget woes that continue to linger.
As recently as March, Democrats and Rauner agreed on $1.3 billion in sweeps to fill a hole in last fiscal year's budget that opened when Rauner insisted that a temporary income-tax hike be rolled back as planned. It was the largest of such "sweeps" conducted in Illinois since 2003.
The special funds cover varied, sometimes obscure, areas of interest. As of Dec. 15, the date of the state comptroller's data the AP analyzed, there was $29 million in various "whistleblower" accounts raised from citizen lawsuits over bureaucratic skullduggery. There also was $205 million in a fund to complement regular state school spending, $3.6 million in rail-freight carrier loan repayments, a "Healthy Smiles" fund of $205,000 to promote oral health and $12 million to assist cities in razing abandoned structures.
No one has suggested sweeps as a means of breaking the continuing logjam Rauner and lawmakers have over a spending plan that should have taken effect July 1.
One lawmaker has suggested the opposite. GOP Rep. David Harris of Arlington Heights is pushing legislation to free up the untouched billions not for general expenses, but for their intended targets. For example, one of the funds helps counties pay the salaries of state's attorneys; Williamson County in southern Illinois filed a lawsuit Friday seeking its share of that money.
The No. 2 House Democrat, Majority Leader Barbara Flynn Currie, sponsored the stopgap plan that was approved this month. During debate, she uttered the contentious term, pointing out that Rauner had initially opposed the idea and speculated that he might be eyeing the funds for an old-fashioned sweep. Rauner spokeswoman Catherine Kelly would not comment on the idea.
Currie is amenable if it's done judiciously, paid out from funds that won't suffer distress and is part of a larger budget deal. But it's not optimal, she said.
"You create the special funds to serve special purposes, and once you begin saying, 'Open, Sesame' - we can just take whatever we like - that's not a good way to run things in part because it raises expectations that you have resources that you don't have next year," she said Thursday.
All told, the AP analysis found at least 745 funds with a $6 billion balance as of early last week. But $469 million is from the federal government and has strings attached. Another $1.4 billion needs no legislative approval to be spent, so they're immune to being rerouted, according to Charles Wheeler III, a professor at the University of Illinois at Springfield.
Wheeler, who has watched Illinois budget-making for 45 years, isn't a fan, calling the sweeps practice "misleading, at best, and downright deceptive" at worst. For example, someone who, through an income-tax checkoff, contributes to the preservation of non-game wildlife (a fund with $1.5 million last week) might object upon learning that it paid for another service.
Harris said Rauner's office asked him to hold off on his bill, but noted that he'll pick up the campaign again next month, when lawmakers return to session. But he knows political winds shift quickly, particularly with $4 billion or more in the mix.
"That's a significant amount of money that would be tempting for anybody looking at a budget problem," he said.
Illinois State Comptroller database of funds: http://bit.ly/1UKtyga
Contact Political Writer John O'Connor at https://twitter.com/apoconnor. His work can be found at http://bigstory.ap.org/content/john-oconnor