Recent Circuit Court Case Demonstrates Risk of Using Transportation Funds for Non-Transportation-Related Expenditures

In a powerful reminder of the need to use taxes for their statutorily authorized purposes, a Cook County Circuit Court recently ruled that Cook County violated the 2016 transportation taxes and fees “lockbox” amendment to the Illinois Constitution by impermissibly spending more than $243 million of revenue from transportation-related taxes and fees on non-transportation-related purposes. The case began when the Illinois Road and Transportation Builders Association filed a complaint alleging that the County impermissibly diverted the transportation-related funds to the County’s Public Safety Fund. The circuit court initially dismissed the complaint, and the case went up to the Illinois Supreme Court, which held that the lockbox amendment applied to local governments, including home-rule units of government, and thus reversed the dismissal. After remand to the circuit court, following a four-day trial, the circuit court held that the County did not meet its burden of proof that it used the $243 million of transportation revenue on expenses that were directly related to transportation, and thus was in violation of the lockbox amendment.

The decision, and the Supreme Court’s prior ruling, confirms that local governments must use transportation tax revenue for transportation expenses. As a result, school districts that levy for transportation funds should be wary of making any fund transfers pursuant to Section 17-2A of the School Code from the Transportation Fund to other operating funds.

For questions related to the use of transportation taxes or the transfer of such funds, please contact your Robbins Schwartz attorneys.