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Fund sweep is still dead

A bad idea to sweep funds, including those supported by taxes and fees, into general revenue and use them to fund services cut in the budget this year once again reared its ugly head yesterday when lawmakers returned for the constitutionally-required veto session.

HCB 3 was vetoed by Governor Eric Greitens and we supported that veto. The bill would have allowed the government to use balances at the end of a fiscal year in nearly all special funds to fund programs that were cut in the 2018 state budget. While using the balance out of some funds that did not use all their allocated money may seem like a good idea, this becomes a bad idea when the fund is supported by special fees, taxes or assessments. Two examples:

  1. DNR’s environmental programs are supported by permit fees. These programs have ongoing costs and the special funds will have balances at the end of the fiscal year so they can meet expenses the following month; and,

  2. The Public Service Commission is funded with an assessment paid by utility companies and recovered through rates all consumers pay. These funds are deposited in a fund that is normally protected from being used for other purposes. If those funds are removed, consumers would be asked to pay those same fees again. Like the DNR funds, the funds should have a balance at the end of the fiscal year to support expenses the following month.

We know there are no easy answers to budget problems, but raiding funds that are funded through taxes and fees paid for specific purposes is not the solution.

The House considered a veto override and that motion failed on a vote of 106-49, meaning Gov. Greitens’ veto of the bill stands.

However, House Speaker Todd Richardson and Senate President Pro Tem Ron Richard announced they were working together to find compromise on funding the social programs at issue. They will be working through Senator Mike Cunningham and Rep. Scott Fitzpatrick and, if a solution is found over the next 3 weeks, they hinted at a potential special session. You can read more here.

We will keep you advised if there is any threat to protected funds, but for now the idea of sweeping funds has been defeated and we thank Governor Greitens for his leadership in vetoing this bill.

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