Limiting the Uses of the Capital Reserve Fund
The Capital Reserve Fund (CRF) is a special fund which is funded at a rate of 2 percent of the previous year’s General Fund Revenue and is intended in theory to finance new and ongoing capital improvement bond projects, and retire debt from previous bonds. In reality the CRF has become a slush fund for legislative pet projects due to a provision in the constitution which permits CRF funds to be used for “other non-recurring purposes”. S.106 proposes an amendment to the constitution that would delete this proviso and therefore restrict the CRF to its intended purpose. South Carolina already has too many special funds which often simply serve as slush funds for legislative interests. The best reform would be to eliminate some of these funds, but the next best alternative is restricting their use to a set of limited and well defined purposes.