The Illinois Transportation Taxes and Fees Lockbox Amendment and Its Effect on Certain School District Inter-Fund Transfers

Nov 17, 2016

Share to:

On November 8, 2016, Illinois voters overwhelmingly approved Illinois Constitutional Amendment 36, the Illinois Transportation Taxes and Fees Lockbox Amendment also referred to as the “Safe Roads Amendment.” The Lockbox Amendment will expand Article IX of the Illinois Constitution (Revenue) by adding new Section 11 which requires that any revenues derived from taxes or fee revenues related to transportation be used only for transportation-related purposes.

Section 11 appears to focus on transportation expenses for the costs of administrating, constructing and maintaining highways, roads, bridges, mass transit, and airports. The primary proponents of the amendment were unions and business groups that will benefit from expenditures for these types of capital infrastructure improvements. However, Section 11(a) also contains broad catch-all language referring to any moneys “derived from taxes, fees, excises, or license taxes relating to … transportation.”

This language leaves unclear whether the Lockbox Amendment prohibits a school district from transferring monies in its transportation fund to its education and its operations and maintenance funds, as now permitted by Section 17-2A(a) of the School Code. While the Lockbox Amendment does not refer directly to school districts, the PAC supporting the amendment, Citizens to Protect Transportation Funding, issued electioneering publications stating that the amendment is intended to apply not only to the General Assembly but also to units of local government. Section 11(b), which defines permissible uses of transportation-related revenue, also explicitly states that “[t]ransportation funds may also be expended for … with respect to local governments, other transportation purposes as authorized by law.” As a result, school districts need to be mindful of the amendment when contemplating any transfer or use of revenues in their transportation fund for other than transportation-related purposes.

The amendment will by law become effective upon a canvassing of the vote and a declaration by the State Board of Election that the amendment is adopted. The declaration must be made within 20 days after the election, but could be sooner if all the returns are received and certified.

If you have any questions regarding the Illinois Transportation Taxes and Fees Lockbox Amendment, or about other types of school district inter-fund transfers, please feel free to contact your Robbins Schwartz attorney.