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Illinois Supreme Court: State money cannot be special

October 31, 2011

By Benjamin Yount
Illinois Statehouse News

SPRINGFIELD, Ill. — The Illinois Supreme Court may have opened the door for Illinois Gov. Pat Quinn (D) and state lawmakers to grab hundreds of millions of dollars for the next state budget.

In a 6-1 decision Thursday, Oct. 27, the high court upheld a 2006 Sangamon County Circuit Court ruling that backed the governor and Legislature’s ability to take money from hundreds of special state funds, a practice commonly referred to as sweeping.

Motorcycle riders sued former Illinois Gov. Rod Blagojevich (D) after he ordered that $296,000 be taken from the Cycle Riders Safety Training Fund (CRSTF). A portion of the fee for an Illinois motorcycle license went into the CRSTF, which the motorcycle education and advocacy group A Brotherhood Aimed Towards Education (ABATE) argued was only to be spent on motorcycle safety education. The governor that year used the $296,000 to pay general state bills.

Clearly, the fee charged by the state for motorcycle registration and licensing is state revenue, and therefore the portion of this state revenue which the General Assembly has allocated to the CRSTF is also public money,” wrote Justice Anne Burke in the majority opinion.

Burke rejected the ABATE lawyers’ argument that the special fund was tantamount to a special trust fund.

With the lone opposing vote, Chief Justice Tom Kilbride wrote in his dissenting opinion that he is “concerned, however, that the legislature may have swept private or federal funds.”

In 2003, the Illinois Supreme Court in City of Chicago v. Holland, ruled that federal dollars cannot be rerouted for state needs.

But Kilbride pointed to $2 million in “fund transfers” from the State Park Fund. Some of the money in the State Park Fund comes from charitable contributions from Illinois taxpayers.

This court has an obligation to address the implications of sweeping private donations and federal grant moneys,” he wrote in his dissenting opinion.

Former legislator and current professor emeritus at Northwestern University Law School, Dawn Clark Netsch, said private and federal dollars are a different issue, but the court was on target with the idea of “public money.”

If there are no specific constitutional protections for money that comes into the state, the General Assembly can always change its mind and do something different with those dollars,” she said. “Just because a bill is passed that sets forth a path to paying certain monies to certain funds, doesn’t mean it will stay that way forever.”

Laurence Msall, president of the Chicago-based public policy research group the Civic Federation said he hopes the lawmakers and governor will use the money to pay the state’s bills.

But even with permission to sweep every state fund, it would not be enough to fix the state’s problems,” Msall said.

Quinn’s budget spokesman Kelly Kraft said there are no plans to sweep any special funds for the next state budget.

Gov. Quinn worked to end the practice of fund sweeps, and sweeps are not a possibility for FY13,” said Kraft.

But the governor has come to rely on interfund borrowing. Quinn borrowed $500 million from special state funds in the current state spending plan. That money is supposed to be paid back at the end of the fiscal year.

ABATE lawyer Rod Taylor said, “The decision just strikes terror into the basic fabric of American life, the sanctity of contract.”

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