Moody’s calls Safe Roads Amendment a “credit negative” for Illinois’ finances

Now that politicians don’t have the flexibility to access transportation funding during emergencies, they’ll use the lack of funds as an excuse to pass higher taxes on Illinoisans.

On Nov. 8, Illinois voters overwhelmingly approved a change to the state’s constitution that creates a so-called transportation fund “lockbox.” This means that all state-collected transportation funds can only be used for transportation projects – even in times of fiscal crisis.

Illinoisans’ decision means politicians must prioritize road construction and transportation over social services, education and health care, whether it’s warranted or not.

The transportation lockbox is bad for Illinois.

By passing the amendment, Illinoisans have:

• Restricted their own power over the state’s spending decisions,
• Given politicians a free pass for their years of financial mismanagement,
• Damaged the state’s financial standing, and
• Increased the likelihood of tax increases.

It’s hard to avoid the conclusion that state politicians have done a poor job managing tax dollars in general. All core services – not just transportation funds – have suffered as Illinois has gone without a balanced budget since 2001.

The state’s credit rating has been downgraded nearly 20 times since 2009. And lawmakers have been unable to pass a full budget for the 2016 and 2017 fiscal years.

It’s all part of Illinois’ decadeslong spending problem and misplaced spending priorities.

In light of this dismal record, it’s understandable that Illinoisans were swayed by an amendment that ties politicians’ hands.

But voters should have been given real amendment choices to truly limit the power of politicians. Choices such as term limits to stop politicians from making a career in politics. Or a remapping amendment that lets voters choose their lawmakers, rather than letting lawmakers choose their voters. Or a pension reform amendment that stops politicians from giving overly generous pension benefits to their union supporters.

Instead, voters have given special interests and lobbying groups with a vested interest in construction and transportation spending something those groups really wanted: a guaranteed funding source.

As a reporter from Crains Chicago Business observed: “[T[he International Union of Operating Engineers, Illinois Road Builders and Illinois Asphalt Pavement Association (convicted insider Bill Cellini’s old group) talked lawmakers into putting a binding referendum on the proposed amendment on the ballot. Then they contributed millions of dollars toward its passage.

The biggest chunk, $1 million, comes from something called the Fight Back Fund. It’s one of those groups that doesn’t disclose its donors, but it’s affiliated with the operating engineers.”

With the approval of the lockbox amendment, Illinois joins the ranks of the 30 other states that restrict the spending of some or all state-collected transportation dollars.

Unfortunately, there is no escape valve in Illinois’ amendment. Maryland’s constitutional amendment, by contrast, allows transportation trust funds to be transferred to the state’s general fund if the governor and the General Assembly agree the state has a fiscal emergency.

On news of the amendment’s passage, the financial ratings firm Moody’s Investors Service criticized the amendment, calling it a “credit negative” for Illinois’ finances.

The ratings agency explained that the amendment prevents politicians from spending tax dollars where they’re needed most, giving lawmakers fewer options in the event of a major financial crisis. That lack of fiscal flexibility will only hurt the state in the long run.

And now that politicians don’t have the flexibility to access transportation funding during emergencies, they’ll use the lack of funds as an excuse to pass higher taxes on Illinoisans.

The transportation lockbox amendment is a bad idea for Illinois law and the principle of responsible governance. It sets a poor precedent by adding an overly specific set of rules that will only encourage the transformation of the Illinois Constitution into a convoluted mess of budget restrictions.

Next time Illinoisans are asked to meddle with the state’s constitution, they’ll want to make sure they’re not being taken advantage of.