Two proposed constitutional amendments that would increase the state’s reserve “rainy-day” accounts to help South Carolina government manage budget shortfalls have yet to gain popular support, and more voter education is needed to ensure passage, according to a new South Carolina Policy Council voter survey.
South Carolina voters will decide on two constitutional amendments this fall. One of the amendments would increase the General Reserve Fund from 5% of state general fund revenue to 7% over time.
The state’s General Reserve Fund can be used to cover year-end operating deficits. If funds are used, the General Reserve Fund must be restored to the constitutionally mandated full amount within five years, with a minimum of 1% added back to the fund each year.
The other amendment would increase the Capital Reserve Fund from 2% to 3% of state general fund revenue and provide that the first use of the Capital Reserve Fund must be to offset midyear budget reductions.
The amendments passed both chambers with no real opposition.
States with healthy reserve accounts are better prepared to withstand sharp declines in revenue collections because of a sour economy, without tax increases or large cuts to critical government services.
The South Carolina Policy Council supports both amendments. However, a new SCPC poll indicates the amendments could fail because of a lack of voter awareness and complex ballot language.
According to the poll, a plurality of voters support both measures in the “plain language” ballot test.
When voters were asked:
A proposal has been made to increase the South Carolina General Reserve Fund from 5% to 7%. Supporters say this will help protect critical government services during a recession and help avoid tax increases. Critics say more money should be spent now to help those in need. Do you support or oppose this proposal?
40% of South Carolina voters indicated they support the measure with 20% opposed. 23% were neutral and 17% unsure. It’s worth noting that the “neither support nor oppose” responses (23%) combined with the “unsure” replies (17%) totals 40%.
Similarly when asked:
A proposal has been made to increase the South Carolina Capital Reserve Fund from 2% to 3%. Do you support or oppose this proposal?
37% percent of voters indicated supporting the measure with 18% opposed. 21% percent said they neither support nor oppose, and 23% were unsure.
However, when voters were read the exact ballot text of the first amendment:
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?
50% of voters said they were unsure or did not understand the question, while 27% indicated they definitely or probably will support the measure. 22% said they would probably or definitely vote against the measure.
Here’s the exact ballot text of the second amendment:
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?
51% percent of voters indicated they were unsure or did not understand the question, while 25% said they definitely or probably will support the measure. 23% percent said they would probably or definitely vote against the measure.
“People who don’t understand ballot questions tend to vote no, and that is concerning for those of us who favor saving more and spending less,” said Dallas Woodhouse, executive director of the South Carolina Policy Council.
Amendment supporters are fortunate that South Carolina’s Constitutional Ballot Commission – composed of the state attorney General, the State Election Commission director, and the Legislative Council director – determined the proposed constitutional amendments required simplified explanations, as provided in state law, which will appear on the ballot.
Amendment 1 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.
Amendment 2 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 offset midyear budget cuts at state agencies.
The State Supreme Court has exclusive and original jurisdiction in any proceeding challenging the amendment explanations prepared by the Ballot Commission.
Woodhouse said South Carolina’s major political parties and candidates can assist in passing the two amendments by advocating for passage to their voters in their respective get-out-the-vote campaigns.
“In a strong bipartisan vote, both political parties supported these amendments in the General Assembly,” said Woodhouse. “Now they are going to have to work to educate their voters for these measures to pass. It would be a shame for these prudent plans to increase savings to fail at the ballot box because people simply did not understand what they do.”
The poll, conducted by respected pollster Morning Consult, sampled 529 registered South Carolina voters from Aug. 11-16. It has a margin of error of plus or minus 4 percentage points.
In South Carolina, a total of 54 ballot measures appeared on the statewide ballot between 1985 and 2018. Forty-five ballot measures were approved, and nine ballot measures were defeated, for a passage rate of 83%, according to Ballotpedia, an online politics and elections encyclopedia.