A conference committee consisting of members of the South Carolina House and Senate is expected to meet soon to consider a change to the state constitution that would increase the amount of revenue required to be held in the state’s General Reserve Fund. The current minimum amount to be transferred from the General Fund to reserves each year is three percent. The legislation would raise that to at least five percent.
The General Reserve Fund now contains $63 million dollars.
Charleston Senator Glenn McConnell serves on the conference committee. He says the reserve fund is important to the state.
It’s used in the case of an operating deficit. We want safety switches in place to make sure we avoid operating deficits. And that preserves the AAA credit rating, which of course makes the cost of borrowing money much cheaper and saves the tax payers quite a bit of money.
The state’s reserve fund was used following Hurricane Hugo, when some funds were borrowed against the fund as a match for FEMA dollars.
Some House leaders have complained that the real budget problem is not as much the percentage of the reserve fund as it is the overall drop in state revenues.
McConnell says the bill will also allow the state’s so-called rolling reserve account, set at 2.5 percent of the General Fund and typically used for building projects, to be used to fill any operating deficits during the last fiscal quarter of the year.
(McConnell on rolling reserve account MP3 :60)
McConnell on rolling reserve account