Park fund scandal a ruse to grab gas tax funds from off-roaders

Aug. 6, 2012

By Wayne Lusvardi

The first wisdom of politics is that things often are not what they seem.  This appears to be the case with the much ballyhooed report that former California State Parks Director Ruth Coleman “hid” $54 million in the off-road vehicle recreation special fund.

A scandal broke out based on reports that the state was too broke to keep open 70 state parks while the Parks Department allegedly had $54 million or more in so-called “hidden” accounts.

In her resignation letter, Coleman said that she was “unaware of the excessive balance” of $133 million in the Off-Highway Vehicle Trust Fund (see Item Nos. 111, 112, 113 in Department of Finance report on special funds).  If Coleman was “hiding” funds. as charged John Laird, Secretary of the Natural Resources Agency:

* Why was the money hidden in plain sight in three accounts designated “Off-Highway Vehicle Trust Fund,” under Fund No. 0263. Which was authorized under the: (a) “Budget Act of 2008 as amended by Chapter 2, Statutes of 2009, Third Ext. Session,” (b) the “Budget Act of 2009,” and (c) the “Budget Act of 2010 as amended by Chapter 13?”

* Why, on May 31, 2011, did State Assembly Budget Committee No. 3 on Resources and Transportation vote to raid the Off-Highway Fund to transfer the funds to the General Fund, as reported by many off-road vehicle recreation organizations?

* Why, on June 6, 2011, did the Public Employees for Environmental Responsibility, stacked with envious state park employees, publicly protest that Off-Road Vehicle fund manager Daphne Greene was not sharing her program’s surplus with its “impoverished agency”?

* Why, on May 6, 2011, did the State Parks Department issue a solicitation for consulting real estate appraisal services through BidSync online bidding services for the acquisition of 415 acres of land to expand the Ocotillo Wells State Off Road Vehicle Park in Imperial County? The likely source of the funds for this land acquisition would have been the Off-Highway Vehicle Trust Fund.

* Why was the Off-Highway Vehicle Trust Fund reported to be a “Special Fund” instead of a “Trust Fund”?  According to off-road organization attorney Diana Tweedy, Trust Funds do not have the same legal status as a Special Fund and cannot be transferred to the General Fund without a state constitutional amendment.

* How could the Off-Highway Fund be “hidden,” when it was re-authorized and amended so many times by the Legislature since 2008?  How could it have been “hidden” if the state Assembly voted to raid the fund in 2011?  How could the fund have been “hidden” if “Public Employees for Environmental Responsibility” brought it to the public’s attention way back in mid-2011?  Why did State Parks initiate activities to expand existing state off-road vehicle parks in mid-2011 from the same fund, if the fund was “hidden?”

An Old Fashioned Grab of Highway Funds

Perhaps the answer to these questions lies with off-roader attorney Diana Tweed’s “Legal Memo” that the Off-Highway Vehicle Fund was a Trust Fund that was funded from a share of gasoline taxes and user fees from state off-road recreation parks.

Which brings us to the second wisdom of politics: “What is alleged to be ‘hidden’ may be a ‘red herring’ meant to divert attention from what is really going on.” Just as smelly fish were used to throw hound dogs off the scent of a fox, so it is with political diversions.

The recent state park special fund scandal apparently is an old-fashioned raid on highway funds.  Only in this case the highway funds are sitting in the accounts of the State Parks Department designated for land acquisition for off-road vehicle recreational parks.  Then why is there what appears to be a cover-up?

Why a Diversion?

While Coleman was allegedly hiding funds, cities and non-profit agencies were raising funds to keep state parks open in their regions so as not to deter tourist trade. How could politicians explain that they were exaggerating that the state was broke, and had no funds to keep all state parks open during an election year?   What Gov. Jerry Brown is doing is purging “Special Funds” — also known as “political earmarks” — and transferring those monies into the deficit-plagued “general gund.”

The Off-Highway Vehicle Recreation Division is a section of the State Parks Department that is not dependent on general funds.  It is self-sufficient and relies on a share of the gasoline taxes generated from the mileage of off-road vehicles and user fees from state off-road recreation parks.  Technically, the Off-Highway Vehicle Trust Fund is not a “special fund,” but a trust fund, just as there is a highway trust fund.

Another apparent reason for the political diversion about “hidden funds” is that there has been an ongoing political and bureaucratic tug-of-war between “preservationists” and “off-roaders” within the Parks Department and the state Legislature.  Off-roaders also tend to be inclined toward being Republican.  A question remains as to whether off-roaders will find a basis to sue the state over the transfer of these “hidden funds.”

Coleman is a registered Democrat with a long track record in state government.  She will likely end up serving elsewhere in government after serving as the “sacrificial lamb” in this political charade.

Fund Raid Takes from Double Tax — When Will It End?

Off-road attorney Diana Tweedy sumed it up best:

“With hundreds of millions of dollars in unpaid loans and the latest permanent and ongoing taking of OHV funds, off road enthusiasts are feeling the pinch. The general fund is supported with income and sales taxes paid by all the Californians. The diversion of OHV Trust Fund moneys to the General Fund is a second tax exclusively paid by off road enthusiasts on top of taxes they pay to the General Fund. These taxpayers are angry and will not put up with politics as usual unless something is done to address their grievances.” 

“Due to hundreds of millions of dollars in unpaid loans and the latest transfer of almost ten million dollars a year from the OHV Trust Fund, the mission of the OHV Program is in jeopardy. The transfers are interfering with Core Program objectives preventing the OHV Program from achieving its purpose. The loans must be paid back and the latest transfer must be revoked before the OHV Program can meet its objectives. 

“Epilogue — In May 2012, the Assembly Budget Committee voted to take more money from the OHV trust fund. When will this ever stop?”

Californians just want to have fun. But the politicians just want more money to waste and are grabbing it wherever they can.