SPRINGFIELD, Ill. – If Gov. Rod Blagojevich has his way with attempting to close the nearly $5 billion state budget deficit, credit union start-ups could see the application fee jump from $250 to $3,000. Blagojevich has proposed adjusting 200 fees to raise $57 million for the state’s general revenue fund, a move that has evoked the ire of many legislators and businesses. In his budget plan for fiscal year 2005, which begins July 1, Blagojevich is asking that state license application and renewal charges be increased to collect what he says is much needed revenue for Illinois. Becky Carroll, a spokeswoman for the governor’s Office of Management and Budget, said the fee increases were necessary because some had not been adjusted since as far back as 1974. “Fees are supposed to generate enough dollars to generate revenue and pay personnel, administrative resources and (code compliance)” among other things, Carroll said. “When those costs go up and the fees have not been adjusted, funding is taken from education, health care and public protection programs.” Carroll said when Blagojevich took office last January, he inherited a $5 billion deficit and after meeting with all agencies that regulate industries and issue licenses and permits, suggestions were made on identifying what fees were overdue for an adjustment. Nearly all have not been increased since between five to 30 years ago Carroll said. In a statement, the Illinois Credit Union System said “we unfortunately cannot render an opinion at this time due to the fact that we have not directly seen the proposal in writing to evaluate it.” Joan Mitnick, program and policy advisor at the Illinois Department of Financial Institutions would only confirm the fee could potentially increase to $3,000 under Blagojevich’s plan. Mitnick formulates and recommends policies and procedures to improve both departmental operations and services to the public. Carroll did not provide the information on the last time the $250 application fee had been increased but if the fee is passed, it could generate an additional $2.75 million in revenue for the state, according to Committee for Legislation Action, an independent group that has been tracking the fees. Of all the proposed fees, the credit union application fee has the highest markup at 1,100%. The Office of Management and Budget looked at fees in other comparable states that have a large number of credit unions to determine an average, Carroll said. Credit unions in Pennsylvania and Missouri, for example pay $3,000, she pointed out. Illinois’ neighboring states pay more on average as well, Carroll said. “When you consider how large and diverse Illinois is and its heavy presence of financial institutions, it is one of the lowest fee states in the nation,” Carroll said, adding that the national average fee is $109 and the Illinois average is $43. The governor also wants to increase the community currency exchange exam fee, which credit unions pay to cover the expense of examiners’ review of books and records. The $200 fee for each examiner day would go up to $500 per day and could add another $205,200 to the state’s coffers, according to Committee for Legislation Action. Another increase credit unions could be impacted by is the consumer installment loan license fee. Entities that make direct loans in amounts not exceeding $25,000 would see the current $300 increase to $450, generating $16,350 in potential revenue. Last year, annual regulatory fees for credit unions increased from a range of $100 to $125,000 to the current $150 to $187,500. Carroll said the legislature “doesn’t support most of what the Governor does” and says any heat that Blagojevich has received for the fee adjustment are “from individuals or groups who are fighting to pay more to regulate their professions.” “This administration has had to make very tough choices,” Carroll said. “You have to remember that when he took office more than a year ago, he inherited a $5 billion deficit from the previous administration. Illinois has a constitutional and statutory obligation to regulate (the state’s) industries.” Illinois legislators have until May 31 to decide on the final budget for fiscal year 2005. Last year, more than 300 fees were increased, according to the Committee for Legislative Action. -msamaad@cutimes.com