Lawmakers Should Put Trust Back in Trust Funds

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Florida TaxWatch is calling on the Legislature to require the passage of individual bills for each trust fund it plans to sweep into General Revenue (GR), according to a new policy report. The report, Putting the Trust Back in Trust Funds, says that separate bills would still allow the Legislature flexibility when budgeting, but requires that members weigh the impact of the sweeps based on individual need.
“Florida’s lawmakers must have flexibility when determining how to craft our state budget, but trust funds are created to fund specific needs and draining them can severely impact those needs,” said Dominic M. Calabro, President and CEO of Florida TaxWatch, the independent, nonprofit, nonpartisan taxpayer research institute and government watchdog. “This increased accountability measure will ensure that the Legislature has access to the funds they need, but will prevent overzealous sweeps that may have unintended consequences.”
Since 2008, the Legislature has swept more than $3.4 billion from trust funds to GR to balance the state budget. Lawmakers have already proposed $174.2 million in trust fund sweeps for the 2014-15 fiscal year budget.
Trust funds are created to provide funds for specific programs, often tied to the revenue source. Sweeping a fund can have negative effects, such as reducing job creation and turning fees that are paid for specific services into general taxes.
The report acknowledges that trust fund sweeps may be occasionally necessary to ensure certain core services do not negatively experience budgetary shortfalls more than other, non-core services. However, before sweeping a fund to more evenly distribute revenue, the Legislature should consider the impact of the sweeps on all areas of the budget.
Requiring a separate general bill for each trust fund sweep would allow for input from legislators, testimony from concerned parties, a staff analysis, and where appropriate, an economic impact estimate.
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