One of the decisions that will be awaiting voters at the polls in November concerns how much cash they want the state to keep in its reserve account. The proposed constitutional amendment would increase the emergency fund from three percent to five percent of General Fund revenues.
Comptroller General Richard Eckstrom has been advocating the increase since he came into office, saying:
Voters are going to have the chance to require that we maintain reserves at five percent of prior year revenues. The reserves we have now will help us this coming year if we continue to experience the downtown.
Eckstrom says the existing reserves won’t be enough to shield agencies from cuts during the coming year,
It will just be a matter of making the cuts a little easier to bear. Agencies have been cut pretty bad. Some agencies have had all the fat cut off. A lot of them have cut into the flesh and some have cut into the bone. There’s a question about how much more agencies will be able to cut. Of course you never know until you have to do it.
Eckstrom says the last thing he wants to see is a tax increase:
If citizens are cutting back the government should have to cut back as well. The answer is living within our means and not looking for new tax sources. Some states are going and taxing grocery bags. I think that’s an insane idea.
South Carolina’s revenues this fiscal year were $310 million less than revenue projections. The Budget and Control Board made $438 million in across-the-board cuts to agencies, avoiding deeper cuts by using the $127 million from the state reserve fund and completed the year with a $71 million surplus.