1998 Amendment G

1998 Ballot Question Pamphlet
Compiled by the Office of Secretary of State Joyce Hazeltine

SDCL 12-13-23 requires the Office of the Secretary of State to prepare and distribute public information concerning constitutional amendments, initiatives and referred measures. This pamphlet is prepared by soliciting statements from the proponents and opponents of amendments and measures.

The title, explanation and effect of a vote for each ballot question were provided by the Attorney General. No other statements on this pamphlet reflect the opinion of the State or the Attorney General.

The information was compiled by the Secretary of State as supplied by the writers, was not verified by the Secretary of State and does not reflect the position of the State regarding the legality or effect of the amendments or measures. The Secretary of State does not guarantee the accuracy of any claims made by the proponent or opponent writers in this brochure.

Constitutional Amendment G

Title: An Amendment to Article VIII of the South Dakota Constitution, permitting the investment of permanent school funds in certain stocks, bonds, mutual funds, and other financial instruments.

Attorney General Explanation

The S.D. Investment Council manages and invests the state permanent school fund, and other educational or charitable funds. The Investment Council may not buy stocks, mutual funds or similar investments with this money. Additionally, if any of these funds lose money, the Legislature must reimburse all losses.

Amendment G would allow the Investment Council to purchase stocks and similar investments. If these investments lose money, the Legislature would only be required to reimburse if the loss was caused by imprudence or other unconstitutional acts.

A vote "Yes" will allow these state funds to be invested in stocks and similar investments, and limit the reimbursement requirements.

A vote "No" will leave the Constitution as it is.

Pro -Constitutional Amendment G

In 1998 South Dakota legislature passed a joint resolution placing Amendment G on the ballot. If approved, the $130 million permanent school and other education funds would be allowed to invest in "stocks, bonds, mutual funds, and other financial instruments as provided by law" by the South Dakota Investment Council. Any loss occurring through an unconstitutional act shall be made good through a special appropriation. The Amendment would allow more investment flexibility to maintain the fund against inflation and to generate higher future income.

The members of the South Dakota Investment Council are professionals responsible for investing over $4.8 billion of state funds. The Commissioner of School and Public Lands is a member of the council. The Council has an exceptional investment record over the past 25 years.

Amendment G would maintain the purchasing power of the school funds for future generations of school children. This would be done with professional management and more diversification of the funds. A yes vote would allow the school funds to be invested similar to the state retirement systems.

Amendment G means preservation for the future of our schools. Vote "YES".

Submitted by: Curt Johnson, PO Box 852, Ft. Pierre, SD 57532. Mr. Johnson is the Commissioner of School and Public Lands.

Con - Constitutional Amendment G

Our founding fathers were concerned about funding the education of our children when they established the permanent education fund. This was a solid, low-risk investment of revenues from land and other sources to help fund education into the future.

This proposed amendment asks us to allow the state to invest these funds in higher-risk stocks, bonds, etc. instead of the current conservative, low-risk investments? Before you decide, consider the following five points:

(1). We had a similar issue in 1994 and again in 1996. How many times do we have to say, "NO"?

(2). The state investment council has enjoyed great success in investing other state dollars. However, higher risk investments potentially earn more dollars, but they also potentially lose more dollars. Our founding fathers intended this fund to be a conservative fund, lasting through the ages.

(3). We are constantly told that our teachers are the lowest paid in the country. If we hit a down market, what risk does that place on our teachers?

(4). What happens if there is a loss? This amendment makes the state liable for all "losses that may occur through any unconstitutional act..." What is unconstitutional? It usually takes a judge to decide. However, win or lose, we, the people, make up the state. Thus, we, the people, would pay for their risky investment with higher taxes. This was not the intent of the permanent school fund.

(5). Finally, this is a constitutional amendment. History shows that markets go up and down. What happens if the market crashes like it did in the 30’s? Our constitution is not only for today.

Submitted by: Sen. Bob Drake, PO Box 92, Bowdle, SD 57428. Senator Drake represents legislative district 23.