Let’s get ready to rumble! According to an ENR-Southeast article by Scott Judy, the road builders in Florida are preparing for another fight against legislators who have raided the state’s transportation trust fund.  This is the second year in a row the Florida legislature has taken measures to raid the transportation funds for general uses. Last year, the raid was only prevented by the veto from then Governor Charlie Crist.  As reported by Scott Judy, Governor Rick Scott is considering a veto of this year’s raid. 

Groups such as the Florida Transportation Builders’ Association are gearing up for the second round fight.  Bob Burleson, president of FTBA, recently commented, "[We] could not be more disappointed with the tone and actions of Florida’s lawmakers. . . . Governor Rick Scott campaigned on a job-creation platform, and we are confident he will consider a veto of this anti-jobs legislation.”

Aside from the political issue, there is a legal component to the analysis: Can a state legislature so easily sidestep the restrictions it puts on the use of state trust funds? This issue has been contested in a recent series of court cases across the country.

Facing deficits between 2001 and 2004, the Colorado legislature passed a series of acts directing the state treasurer to transfer over $442 million from thirty-one earmarked funds to the state’s general fund. Three of these earmarked funds were designated as “trust” funds by statute. A group of Colorado taxpayers challenged the transfer of the earmarked funds in a case called Barber v. Ritter. Among other things, the taxpayers argued that the three “trust” funds were irrevocable trusts that the legislature could not unilaterally revoke.

The case made its way to the Colorado Supreme Court, which decided in 2008 that the legislature could transfer the funds, including the “trust” funds. The court reasoned that the legislature could not use the statutes creating the “trust” funds to modify its constitutional power over appropriations. The court concluded: “[E]ven if the cash funds are public trusts, they are not irrevocable trusts, and the legislature has the authority to amend them to allow for the transfer of monies to the General Fund.”

A similar challenge to legislative raids of earmarked funds was also recently decided by the Supreme Court of Ohio.  The plaintiffs in Ohio argued that their legislature’s raid violated the Contracts Clauses of the state and federal constitutions.  The trial court agreed, finding that the raid on the earmarked funds was unconstitutional.  Both the Court of Appeals and the Supreme Court of Ohio reversed, finding that the legislature had plenary power to enact the targeted legislation.  

Another case pending in the Illinois Supreme Court addressed a similar constitutional challenge: whether the legislature’s raid on earmarked trust funds violated the Takings Clauses of the applicable constitutions.  Like the Ohio case, the court in Illinois must decide whether the legislative earmarking creates an irrevocable trust.  The Illinois raid was upheld by both the trial court and the appellate court, but one of the three appellate judges dissented. The dissent plainly states that the legislature can create an express trust, and found “the legislature’s use of the term ‘trust fund’ to be compelling evidence that it intended to create a trust.”

It will be interesting to see if the Supreme Court of Illinois follows Colorado’s lead. If they do, it seems that state legislatures are as free to re-appropriate “trust” funds as any other funds. This is alarming for those concerned with transportation trust funds, which have been frequent targets of legislative raids in recent years.

Image: Bid Ed