Scott Reeder
Journalist in Residence

Soon it may cost more than $100 to renew your license plate in Illinois.

The Senate voted Wednesday to increase the renewal fee by $2 – ostensibly to funnel money to the Illinois Department of Natural Resources. The measure – which had already been approved by the House – now goes to Gov. Pat Quinn for consideration.

Reporters and lawmakers swallowed the line about higher taxes to pay for parks hook, line and sinker.

When a tax or fee is raised, it is essentially funding the overall size of government – not necessarily a particular program.

You can say the new revenues will go to a particular program, but saying it doesn’t make it true.

The concept of budget fungibility can be a tough one for folks to grasp.

Here is how I explained it in a newspaper column awhile back:

Imagine a giant bucket labeled “government” and a group of people standing around it ladling in money and saying in loud voices: “This is for education.” “This is for health care.” “This is for police.”

And now imagine a different group of people coming back to that same bucket four years later and ladling out money and announcing how they will spend it: “This is for pensions.” “This is for pay raises.” “This is for prisons.”

The only thing assured in such a scenario is that people will put money into the bucket and people will take it out. What changes over time is allocation.

So when taxes and fees are increased, they pay for government in aggregate – not for a specific program.

No one should be more keenly aware of this than the folks at IDNR who saw the Blagojevich administration swoop in and raid various funds, such as Snowmobile Trail Establishment Fund, and use it to prop up other aspects of state government.

Senate Bill 1566 calls for funneling the increased license plate fees into the Park and Conservation Fund. If you think that is an ironclad guarantee for continued increased funding for parks, think again.

A classic example comes from the 1970s. When the state lottery was created, legislators sold the idea to voters on the premise that the money generated would go toward education.

In reality, the money simply replaced tax dollars legislators would have spent on education. They instead spend those dollars on other projects.

So schools didn’t end up gaining money from the new revenue stream.

It’s a scenario that has played out time and time again with various special revenue increases.

But it’s a lesson yet to be learned.

When a tax or fee increase is proposed, it should always be considered in the light of funding all of state government rather than one particular program.