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Yen to Escape Legislative Review With a Bid for Earmarked Funds

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By Lowell L. Kalapa

If you ever have the free time to spend a few days down at the legislature, you will quickly come to understand why so many programs yearn for their own source of funding.

It isn’t any fun sitting around on those hard koa benches waiting to make a bid for an appropriation for your program. After all, inquisitive legislators ask too many questions. That’s why so many program officials are on a constant search to find a way to automatically fund their programs. Some have been successful like the affordable rental housing program and the natural area reserve program which get a cut of the conveyance tax.

As money gets harder and harder to come by, more programs are looking for ways to protect themselves from the budget axe. One program in the department of land and natural resources wants to take money from the state highway fund by earmarking a portion of the state fuel tax. Originally, the earmarking of the fuel taxes for the trails and access program was predicated on a federal program initiated by Senator Steve Symms of Idaho which was to provide federal funds for off-road vehicle trails and accesses.

Money was set aside at the federal level and was to be doled out to the states if they set up a trails and access program and appropriated funds in an equal amount to the fuel taxes on sales made to off-road vehicles or a set percentage specified in the federal law. While the federal law did not require the transfer of fuel taxes into this program nor did it require that a special fund be established, local proponents seized upon this opportunity as a way to get guaranteed funding of a trails and access program.

For the last few years and again this year, proponents have asked lawmakers to set up a special fund and earmark fuel tax revenues for the trails and access program despite the fact that federal dollars are substantially less than origionally envisioned. Despite that fact, proponents still want the earmarked funds because it will mean automatic funding for the program.

And this is the problem, earmarking, once given, removes the program from periodic review by lawmakers as the moneys are designated and there is nothing that lawmakers can do with that money other than to spend it on that program. As a result, there tends to be a lack of accountibility as no one is watching how that money is spent.

One such example is the environmental response fund which was established as a savings account to pay for any accidental clean up that may be necessary should an oil spill occur on the oceans surrounding Hawaii. After a couple of years, an examination of the expenditures made from the fund included expensive filing cabinets, travel, conference registration, and other questionable items. Remember this was supposed to be a fund that was designed to sock away a reserve so that if a spill occurred, the state would have the means to pay for a spill clean-up.

Earmarking of revenues and the creation of special funds is one reason why the public is so cynical about the claim that the state doesn’t have the money to fully fund programs or pay public employee pay raises. Because lawmakers did such a “good job” of creating these hiding places for state monies in the past the public finds it hard to believe the “poor mouthing” of elected officials.

If lawmakers do approve the transfer of these fuel taxes, what will lawmakers do when there aren’t enough revenues in the highway fund to meet all of that fund’s needs? Siphoning off these fuel tax revenues for non-highway needs means that motorists will be asked to make up the lost money by a hike in the state gas tax.

The long and short of it is that stealing of fuel tax revenues for a non-highway program means a tax increase for highway users.

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