Illinois Transportation Lockbox

July 21, 2016

There will be a constitutional amendment on the Illinois November ballot for voters' consideration of for a "Transportation Lockbox," HJR CA36.  This amendment would put all revenue raised through the state’s motor fuel tax, tollways, licenses and vehicle registration fees into a protected fund, also referred to as a “lockbox.”

The amendment is an attempt at circumventing some of the accounting gimmicks used to balance the state budget. These gimmicks include:

  • The use of checkbook accounting to balance six "budgeted" funds.
    • The state budget law requires only six "budgeted" funds, including the general fund, to be balanced using generally accepted accounting principles (GAAP) "for governments." Under governmental GAAP, individual funds are accounted for using modified accrual basis accounting, instead of full accrual accounting.
  • The sweeping of "non-budgeted" funds to "balance" the budgeted funds.
    • Governors and legislators have determined that cash balances in "non-budgeted" funds can be transferred to "balance" budget funds. The transportation fund is one of hundreds of non-budgeted funds.
  • The recording of transferred funds as "revenues" or "funds available."
    • The balanced budget requirement only requires "funds available" to equal "expenditures."

Truth in Accounting calls for a holistic approach to address the way Illinois calculates its "balanced" budget. This includes FACT based budgeting which requires governments to include revenues in the period its is earned and expenses in the period incurred, regardless of when associated cash is actually received or paid.



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