California Raids 9/11 Memorial Fund to Balance Budget

May 30, 2012

The desperation of California’s government for revenue has reached a new low: raiding money meant to provide scholarships to children of 9/11 attack victims. Only 1.5 percent of the money from the sale of specialty state license plates went to the scholarships, the Associated Press found, with most of the remainder being used to plug the state’s budget gaps:

While 40 percent has funded anti-terror training programs, $3 million was raided by Gov. Jerry Brown and his predecessor, Arnold Schwarzenegger, to plug the state's budget deficit. Millions more have been spent on budget items with little relation to direct threats of terrorism, including livestock diseases and workplace safety.

Moreover, the California Department of Motor Vehicles has been advertising the plates as helping the children of Sept. 11 victims, even though the state stopped funding the scholarship program seven years ago. The specialty plate fund continues to take in $1.5 million a year.

Californians who lost loved ones in the attacks take the raid on the license plate fund as an affront to the memory of those who died. "I can't believe that they would do that," said Candyce Hoglan, who lives in the San Francisco Bay area and bought a plate to commemorate her nephew, Mark Bingham. "We're paying extra for the plate; we're making a point, and it means a lot to us."

The language about helping children has since been removed from the California DMV website.

Ultimately, only $21,381 was distributed through the scholarship program to spouses and children of September 11 victims before it was discontinued in 2005. Altogether, the state has taken about $3 million from the fund over the past few years, under both current Gov. Jerry Brown (D) and his predecessor, Gov. Arnold Schwarzenegger (R). These reallocations of funds were labeled as loans, though no conditions or deadlines for repayment were established. Gov. Brown’s spokeswoman has stated that the state has no current plans to repay the loans.

“Fund sweeps” that grab revenue from dedicated accounts such as this are one of the side effects of bad fiscal stewardship. When states have backed themselves into a financial corner, they will do almost anything to continue avoiding difficult fiscal reforms. The reallocation of funds from a 9/11 memorial fund seems a good measure for when to determine whether a state has hit rock bottom with regard to its poor financial decisions.

For better ideas on how California can fix its budget woes, click here.

Get Email Updates from the Tax Foundation

Follow Us

About the Tax Policy Blog

Subscribe to Tax Foundation - Tax Foundation's Tax Policy Blog The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.

Monthly Archive