Library Not So Fine

The Governor has found a new revenue source to exploit: Your phone bill.

Here, he eliminates GPR funding for libraries, and instead uses the Universal Service Fund:

The USF was created in 1993 when the telecommunications industry was partially deregulated. Its purpose is to ensure equal access to technology like 911, devices for the hearing impaired and the Internet. In recent years, the Governor and the legislature has raided the fee to partially fund libraries.

But now the Governor is proposing even more of it be used to fund your local library, thereby freeing up the general tax revenues for more spending elsewhere.

Now, you may ask what the difference is if the money comes from your right pocket or your left pocket; you are still out the money. First, there is the principle of honest budgeting and keeping segregated fees for the purpose for which they were intended. Then there is also a neat little item regarding this newest shell game…

The Governor’s recommendation also includes a nonstatutory fiscal change provision to delete $11,297,400 General Purpose Revenue in 2008-09 and instead provide $11,297,400 Segregated Fees (From the Universal Service Fund) in 2008-09. However, because this amount was not appropriated originally in the 2008-09 fiscal year, assessments on telecommunications providers (which will be passed through to you, the consumer) this year are insufficient to cover the additional payment. That is, there is not enough money in the USF to make this year’s payment.

According to the Legislative Fiscal Bureau: Because the USF would have insufficient funding for this provision, the PSC would use interfund borrowing authority, provided to the Secretary of DOA under current law, to reallocate available balances from eligible funds in the state investment fund in order to cover the additional outlay in 2008-09. The PSC would then be responsible for levying sufficient charges on telecommunications providers, in 2009-10 or future fiscal years, in order to repay the borrowed funds. Funds that borrow money through temporary reallocations are charged interest at the earnings rate of the state investment fund. In February, 2009, this annualized rate of return was 0.88%.

To sum it up: The Governor is proposing to raid yet another segregated fund to pay for something other than which it was intended, and since the new fees on businesses that feed the fund (which will eventually be assessed and passed on to consumers) have not been imposed yet, he’ll borrow the funds in the interim.

Senator Mike Ellis said it best, here.

Once again, the governor has shown that if you give him an inch, he’ll take a mile,” Ellis said. “He’s not only opening the door he and the legislature cracked in 2003, he’s tearing it completely off its hinges. This is not a fee. It is a $12.6 million tax hike.”

The Joint Finance Committee is scheduled to debate and vote on this tax hike measure Wednesday.