Review taxes and fees associated with statutorily-dedicated accounts

Review the taxes and fees associated with statutorily-dedicated accounts in order to ensure that they are set at appropriate levels (and reduce where necessary).

By prohibiting the use of these balances for funds consolidation, the Legislature would have to appropriate the balances in these funds to their dedicated purposes over time, since retaining a balance in these funds would no longer serve a broader budgetary purpose.

It is also critical to review the amount of each dedicated tax or fee that is associated with a dedicated account. For example, the estimated ending balance for FY 2013 of the Petroleum Storage Tank Remediation account is $143,276,000. The account is expected to earn additional revenue totaling $47,199,000 in FY 2014 – 2015. Nonetheless, during the 83rd Legislature, lawmakers only appropriated $46,465,994 from the account in the FY 2014 – 2015 biennium budget, leaving an estimated $144,009,006 available for budget certification.

Each tax or fee must be set at a rate that sufficiently meets the needs of the purpose for which it is being collected, in turn, lowering the unnecessary burden on taxpayers. Since these accounts currently hold such large balances in the aggregate, it is clear that many of the associated taxes and fees are likely higher than what is necessary for the accounts to achieve their intended purposes. The House Ways and Means Committee and the Senate Finance Committee should undertake a review, engaging with industry stakeholders and the general public, to establish appropriate fees and tax rates as part of the process of ending the practice of funds consolidation.