Ballot questions posed to SC voters about amending state constitution — here’s why

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Published: Oct. 31, 2022 at 7:34 PM EDT
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COLUMBIA, S.C. (WIS) - During the Great Recession in 2008, South Carolina emptied out its reserves, and lawmakers had to make midyear budget cuts to keep the state running.

If that happens again, members of the legislature say they want South Carolina to be better equipped to stave off those hits, and they are now asking voters to give them the ability to do that.

When South Carolinians head to the polls for the general election, they will all see two questions posed to every voter about requiring more money be added to state reserves each year.

Proponents of these constitutional amendments, who are asking voters to vote “yes” to them, said they will require the state to save more and spend less of its money.

“Without raising taxes, the state will put more revenue into its rainy-day funds to ensure it can meet the needs of running the state government in the event of an economic downturn,” Rep. West Cox, R – Anderson, said.

The first question relates to South Carolina’s general reserve fund, commonly referred to as its rainy-day fund: Amendment 1 - Must Section 36(A), Article III of the Constitution of this State, relating to the General Reserve Fund, be amended so as to provide that the General Reserve Fund of five percent of general fund revenue of the latest completed fiscal year must be increased each year by one-half of one percent of the general fund revenue of the latest completed fiscal year until it equals seven percent of such revenues?

That question asks if the state legislature should increase the amount of money it is required to put in its rainy-day fund from 5% of the state’s revenue from the year before up to 7%.

That would be phased in over four years, with the requirement rising a half-percent each year.

The second question concerns the state’s capital reserve fund, which primarily but not exclusively funds major capital projects: Amendment 2 - Must Section 36(B), Article III of the Constitution of this State be amended so as to provide that the Capital Reserve Fund of two percent of the general fund revenue of the latest completed fiscal year be increased to three percent of the general fund revenue of the latest completed fiscal year and to provide that the first use of the Capital Reserve Fund must be to offset midyear budget reductions?

That question asks if the amount of money required to go into capital reserves should increase from 2% to 3%, and it would also mandate any money needed to offset the midyear budget cuts comes from this account first before tapping into the larger general reserves.

If voters approve both these amendments, the amount required to go into the combined reserves each year would jump from 7% of the annual revenue to 10%.

They have the backing of groups including the South Carolina Policy Council and Americans for Tax Reform, who held a joint news conference Monday in Columbia to encourage South Carolinians to vote “yes” on both measures.

“If you’re on the left side, there’s a real reason to vote for these amendments because you can block significant cuts to government services in times of economic downfall,” SCPC Executive Director Dallas Woodhouse said. “If you’re on the right, you can help stave off tax increases when times get tough for state government.”

Nothing currently prevents the legislature from adding more money to reserves than constitutionally required, and the General Assembly has been doing that in recent years as the state budget yielded surpluses.

“What this does is binds the hands of future General Assemblies so that they have to save more to ensure that, in the future, legislators at the State House are being as fiscally responsible as we have been over the last several years by saving and boosting these reserve accounts,” Cox said.

The state legislature voted earlier this year to put these questions before voters on the ballot.

While they generated near-unanimous support, Senate Majority Leader Shane Massey, R – Edgefield, voted against their inclusion on the ballot.

He agreed the General Assembly should save more money, making the case it should be even higher than the 10% that would be saved under these two amendments, but argued this proposal is not the most responsible way to do it.

“This is a trick. The capital reserve fund is not really a reserve fund. All that does is you keep it for a year before you figure out which projects you want to spend it on,” Massey said during a debate in the Senate on June 15, countering that all the additional money should go into the general reserve fund.

Cox, who worked to get the ballot measure approved in the House of Representatives, called that a mischaracterization, responding members of the General Assembly would rather spend money when they have it instead of tying it up for another year.

These are two separate questions to change the state constitution, so voters can vote the same way for both of them, or vote “yes” to one and “no” to the other.

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