Feds have warned state before about fund use
The State Journal-Regsiter
The U.S. Fish and Wildlife Service’s recent warning to the state not to use hunting and fishing license revenues to pay other bills is not a first.
Several times in the past five years, the state has been in hot water over attempts to use federal funds dedicated to wildlife and fish restoration to help balance the budget.
In December, the Fish and Wildlife Service notified Gov. Rod Blagojevich’s office that legislation pending to sweep $9.25 million from half a dozen funds where license dollars, stamp revenues and related fees are deposited could cost the state $16 million in federal matching funds.
The $9.25 million was part of $211 million in balances swept from a long list of special state funds.
But some funds have restrictions on how they can be spent, notably those that also receive federal money. Misuse of the funds can result in loss of the federal share.
Legislators are now hurriedly trying to put the restricted funds back where they belong, possibly by the end of business today.
The General Assembly has to restore the “swept” money by Feb. 2. If no corrective action is taken, Illinois risks losing all federal wildlife money for the fiscal year, totaling about $25 million.
“This seems like a rather short-sighted economic decision — one we trust will be reversed,” said Jason Holm, spokesman for Region 3 of the Fish and Wildlife Service based in Fort Snelling, Minn.
States have to agree not to spend license and stamp money on things other than wildlife and fish management in order to receive a share of excise taxes charged on the sale of sporting goods such as ammunition and fishing equipment.
Each state receives a share of the taxes collected based on a formula that takes in the number of licenses sold, population and land area.
Illinois caught the attention of the Fish and Wildlife Service on other occasions for its attempted use of restricted funds:
A proposal to close 11 state parks last fall was complicated by the fact that facilities built with federal dollars needed to remain available to the public or be replaced at a similar value elsewhere. Seven parks eventually were closed.
Critics said closing the parks would save the state little money if federal grants had to be repaid.
“Portions of those parks have to remain open, or there is access continued to be allowed, if they were paid for with federal dollars,” said state Department of Natural Resources spokesman Chris McCloud.
For example, a high-water boat ramp constructed with a federal grant at Weldon Springs State Park remains available to boaters even though the park is closed. The ramp lets boaters put in at Lake Shelbyville even if other ramps are under water.
Last September, DNR learned that a $1 million grant to help build a boat access facility at Pere Marquette State Park near Grafton was being held up until the state could account for $600,000 in hunting and fishing license money that may have been improperly spent.
Not all functions of DNR can be paid for with license funds, and employees working on wildlife and fish projects routinely keep records of their hours to be sure they are billed to the correct fund.
An audit conducted by the Fish and Wildlife Service of the 2003-04 fiscal year turned up the problem. Until now, DNR had not provided a satisfactory response.
Holm said a tentative, “corrective action plan” has been reached with DNR over the boat-access grant, and the service “is working with (the state) to tweak it.”
In 2005, the Illinois auditor general criticized DNR for using restricted funds to pay bills owed to the Department of Central Management Services, pointing out the potential loss of federal funds.
The accounts involved included the Wildlife and Fish Fund and Salmon Stamp Fund.
“Payments were also made from two license and stamp funds, which could be considered an illegal diversion of license revenues under federal law,” the report summary said. “Diversion of these funds through efficiency initiative payments could invalidate past and future funding from the USFWS (United States Fish and Wildlife Service).”
DNR also tapped funds donated through a state income tax check-off designed for wildlife preservation.
Also in 2005, the state backed down from a plan to divert about a third of the $10 million Illinois Habitat Endowment Trust Fund to general revenue to help balance the state budget.
Holm said state officials from grant managers to the governor’s office should be keenly aware of the rules governing restricted funds.
Katharine Ridgway, a spokeswoman for the governor’s office, said Monday Blagojevich was aware of potential problems, and that’s why he vetoed $55 million of the $221 million in sweeps.
“For that reason, the governor did not approve the full amount of spending appropriated by the General Assembly,” she said. “Thus the dollars from the Fish and Wildlife Fund have not been spent, and our office has been working on legislation to put the dollars back into the fund.”
Holm said the Fish and Wildlife Service negotiates with the state each time the use of federally restricted funds becomes an issue.
“Most have been less blatant than this (most recent) one, and have been able to be resolved,” he said. “However … non-punitive measures have not been effective to date.”
“This money isn’t a slush fund to be raided by decision-makers,” Holm added. “It belongs to the people of Illinois.”
Bob Becker, president of the Illinois Federation for Outdoor Resources, said he and other leaders of conservation groups are concerned about the short timetable facing lawmakers trying to fix the problem.
“I think there is a movement afoot within government and certain legislators that are trying to put a fix to that real quick,” Becker said. “They are trying to get (the money) not spent and back where it belongs.
“There are certain things that are going to have to happen awful quick.”