State's special funds do come in handy
POSTED: Friday, December 26, 2008
The state's appetite for creating hundreds of special funds in which to stash cash for certain purposes has often been criticized as fiscally irresponsible, so it is no small point of irony that these caches could save government from a $1 billion budget deficit.
Gov. Linda Lingle's formula to avoid fiscal shortages would re-purpose $36 million designated for refunding beverage container deposits to consumers and recycling businesses, and another $9 million from cell phone surcharges collected for a network that pinpoints emergency call locations.
The biggest chunk of money - $40 million to cover expenses for the current fiscal year, and another $35 million for fiscal 2010 - would be drawn from the “;rainy-day fund,”; a reserve that comes from the state's share of a tobacco settlement.
With revenues falling and income projections increasing bleak, the governor - who has previously objected to raiding special funds - has little choice but to use available money. The alternative would be deeper spending reductions or to shrink the state's payroll, which could cause more economic damage.
Transferring rainy-day money requires a two-thirds vote of the Legislature. Lawmakers should go along with the proposal even though it would leave a balance of only $15.7 million.
The two other transfers, however, present difficulties in view of a Supreme Court ruling that says funds designated for specific purposes cannot be used otherwise. Legislators should, if necessary, rewrite the laws that set them up to conform with the ruling and consider abolishing some of them.
The container fund would be depleted by the transfer and though officials say it would be replenished adequately, there might be objections. However, the state is in dire straits and tough times require tough decisions.