Vote No on South Carolina Ballot Measures 2 & 3

South Carolina has three statewide ballot questions on the 2008 ballot, which are amendments to the state’s constitution.

Voting “Yes” to  Amendment 1 brings the state constitution in compliance with the SC State Code by eliminating the constitutional mandate setting the female age of consent at 14.

Voting “No” to Amendment 2 will preserve the state constitution’s prohibition on investing state employee retirement funds in the stock market (“equity securities” in the language of the amendment).

Voting “No” to Amendment 3 will preserve the state constitution’s prohibition on any local government agencies from investing their employees’ retirement funds in the stock market.

Amendments 2 & 3 depend on an ever-growing stockmarket to increase the State’s investments for its retirees.  Given the current state of the stock market,  we shouldn’t get state retiree funds tied up in unstable equities.

Public agencies who previously invested their retirees’ pensions in stocks have experienced some dire losses recently, as this November 2, 2008 New York Times article explains:

NY Times, November 2, 2008
The Reckoning
From Midwest to M.T.A., Pain From Global Gamble

“People come up to me in the grocery store and say, ‘How did we get
suckered into this?’ “-  Marc Hujik, of the Kenosha, Wis., school board

On a snowy day two years ago, the school board in Whitefish Bay, Wis., gathered to discuss a looming problem: how to plug a gaping hole in the teachers’ retirement plan.

It turned to David W. Noack, a trusted local investment banker, who proposed that the district borrow from overseas and use the money for a complex investment that offered big profits.

“Every three months you’re going to get a payment,” he promised, according to a tape of the meeting. But would it be risky? “There would need to be 15 Enrons” for the district to lose money, he said.

The board and four other nearby districts ultimately invested $200 million in the deal, most of it borrowed from an Irish bank. Without realizing it, the schools were imitating hedge funds.

Half a continent away, New York subway officials were also being wooed by bankers. Officials were told that just as home buyers had embraced adjustable-rate loans, New York could save money by borrowing at lower interest rates that changed every day.

For some of the deals, the officials were encouraged to rely on the same Irish bank as the Wisconsin schools.

During the go-go investing years, school districts, transit agencies and other government entities were quick to jump into the global economy, hoping for fast gains to cover growing pension costs and budgets without raising taxes. Deals were arranged by armies of persuasive financiers who received big paydays.

But now, hundreds of cities and government agencies are facing economic turmoil. Far from being isolated examples, the Wisconsin schools and New York’s transportation system are among the many players in a financial fiasco that has ricocheted globally.

The Wisconsin schools are on the brink of losing their money, confronting educators with possible budget cuts. Interest rates for New York’s subways are skyrocketing and contributing to budget woes that have transportation officials considering higher fares and delaying long-planned track repairs.

The rest of the article is available here to NYTimes:

At the moment it’s free, but will be subscription only in a while.


Posted on November 3, 2008, in Politics, South Carolina and tagged , , , , , , , , . Bookmark the permalink. 1 Comment.

  1. Thanks for the post on the three amendments to be voted on.

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