Prepared by South Carolina Libertarian Party Legislative Affairs Committee
Election day in South Carolina is on Nov. 8th, 2022. Alongside many elections, there are state constitutional amendments on the ballot for the voters to consider. This year’s amendments are in regards to the SC state Reserve Funds. Let us call them what financial advisers call them: Rainy Day Funds. In order to understand these amendments we need to look at why the state has Rainy Day Funds.
First, what is a Rainy Day Fund? For the general citizen a Rainy Day Fund is a strategic stash of money that can be used in an emergency. For the government the definition is similar but the emergencies these cover are mismanagement of funds, which would cause an agency to exhaust their budget.
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? Explanation: A ‘Yes’ vote will increase the amount of
money state government must keep in the General Reserve Fund (its
“rainy day” fund) from 5% of the previous year’s revenue to 7% of
the previous year’s revenue.
Question 1 analysis:
The amount of revenue put in the funds was last increased in 2010. What lawmakers want to do is hide a budget surplus instead of returning the money back to its rightful owners: the voters. $440,237,611 of South Carolinians’ hard-earned money was locked away as of July 1st 2021 in the state’s general reserve fund, where, since 2002, it has served as a justification for the government to greedily withhold what rightfully belongs to its citizens. This currently works out to $85 dollars per resident in the state of South Carolina. That $85 dollars should be returned to the voters so that it can be used in the private economy instead of propping up the government.
Suggestion: Vote “No.”
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 of set midyear budget reductions?
Explanation A ‘Yes’ vote will increase the amount of money state
government must appropriate to the Capital Reserve Fund (the
“reserve and capital improvements” fund) from 2% of the previous
year’s revenue to 3% of the previous year’s revenue and require that
the Capital Reserve Fund’s first priority is to of set midyear budget
cuts at state agencies.
Question 2 analysis:
Ballot Question 2 addresses the capital reserve fund. As of July 1st 2021 the state had $183,584,490 in the capital reserve fund which equates to .55 cents per resident of SC. It is the libertarian stance that everyone has the right to decide how their money is spent, and those funds should be returned to the taxpayers.
Suggestion: Vote “No.”
Libertarians take the stance that leaner governments run better. Having the rainy day funds does not encourage the government to run like the family living paycheck to paycheck and to be prudent and wise when spending taxpayer dollars. It needs to run on only what it needs to operate. If there is a surplus, it should be returned to the people, not put into a slush fund to join other money that was stolen from the people.