
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, March 26, 1991                   TAG: 9103260480
SECTION: EDITORIAL                    PAGE: A-6   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

TAPPING TRUSTS/ EARMARKED FUNDS AVERT TAX INCREASE

VIRGINIANS knew the state's budget for 1990-92 was balanced with the help of a few accounting maneuvers - shifting money from one pocket to another so that increased expenses could be met without raising taxes. They're beginning to learn that much of this was a form of pilfering that will create unexpected and unwelcome shortages in the future.

Gov. Wilder and the General Assembly "found" about $1 billion this year by tapping several state trust funds. These are monies supposedly earmarked for special uses. Instead the commonwealth dipped into them for cash to meet General Fund expenses. It wasn't even borrowing; there's no apparent plan to pay them back.

The lottery, once designated for capital improvements, yielded up $552 million. The game-protection fund lost $1.2 million meant for building boat ramps and for law enforcement on inland waters. The waste-tire trust fund, which helps dispose of old tires, will have to beware writing rubber checks; it was hit for $175,000. The "Two for Life" fund, which aids rescue squads, was bled of $400,000.

State colleges are giving up part of their student activity fees. The college building authority lost $9 million, the Literary Fund (intended to finance public-school construction) $88 million and the U.S. 58 corridor development fund $49 million.

Only a year ago, Wilder was in Washington telling a congressional committee that the federal government should release from its Highway Trust Fund "monies that have been paid in motor fuel taxes intended for highway improvements in the commonwealth." The governor, bothered that these monies were "being held hostage" by the executive branch, wanted them put to their intended use. Had the White House been dipping into that fund to help offset federal deficits, Wilder rightly would have been outraged.

"If this were a private company," commented Del. George F. Allen, R-Charlottesville, about the state trust-fund shenanigans, "this would be embezzlement." That's an exaggeration. But there is an element of dishonesty in juggling the books to make it seem that money has appeared from somewhere to satisfy the state's constitutional mandate of a balanced budget.

The dishonesty is compounded when earmarked funds are put to this purpose, especially when there is no intent to pay them back. The victims are not just groups whose needs the trust funds are supposed to meet, but the entire public. If its members aren't bothered by this fiscal chicanery, the deed may be repeated at leisure in the future.

by CNB