As lawmakers head to Pierre with the budget foremost on the agenda and talk of the potential of cuts to all sorts of programs including k-12, Senator (soon to be Rep) Gene Abdallah raises the question about use of the reserve funds in today’s Argus:
Sen. Gene Abdallah, R-Sioux Falls, is moving to the House in January. He questioned the need to make cuts to education in the next budget when the state has $107 million in reserves. Abdallah said he would prefer to use those reserves now and make cuts later if revenues haven’t rebounded.
So are reserves a “rainy day fund”, a “special project fund” or a “put off the hard choices fund”? And which of those would sparing k-12 cuts be?
Two other lawmakers want to raise sales tax during the summer to avoid using the reserves and avoid cutting k-12 including SDWC favorite Stan Adelstein. Read about that proposal in the RC Journal. Rep Don Kopp, who the Journal identifies as conservative, would rather see tax increases than using the reserve funds.
But the District 35 Republican said he is also open to a temporary tax increase if spending cuts don?t go deep enough to spare the state?s reserve funds.
?Maybe even institute a sales tax or a gas tax or something like that with a sunset clause,? Kopp said.
That is something the Legislature should do, Kopp said, ?rather than dip into our rainy day fund.?
Should the reserves be so sacred that a tax increase is preferable to spending the savings? And if you advocate raising taxes — even temporarily (because you know a tax increase is never permanent) — are you still considered conservative?