SC State says it needs a $13 million bailout

ashain@thestate.comJanuary 31, 2014 

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S.C. State University has a $4.4 million budget deficit and needs $13 million to pay its bills and loans, lawmakers were told Friday, leading one to call for an investigation.

The state’s only historically black public college is in trouble after years of deficits and declining enrollment, the school told state budget officials.

State budget leaders have asked university president Thomas Elzey to submit a financial plan within two weeks, according to a letter sent to all state lawmakers Friday.

The estimated $13 million in outstanding bills and loans is almost double last year’s total, according to a letter that Elzey sent to the State Budget and Control Board last week, which was made public Friday. Some of those loans were used to help with previous deficits.

“We ... welcome your assistance in helping the university ensure that its fiscal house is in order so that we can provide a world-class education to the many deserving students,” Elzey wrote state budget director Les Boles.

State Sen. Shane Massey, R-Edgefield, called for an investigation into how S.C. State’s finances have become so distressed.

“It seems they have been just shifting money around,” Massey said. “It looks like they might not be able to make ends meet.”

Elzey was unavailable for comment Friday because S.C. State was preparing for a vigil in honor of a football player slain on campus a week ago, the school said.

S.C. State trustees chairman William Small said Friday the school has resources to continue operating. “We are marshalling our resources and putting on our thinking caps.”

S.C. State’s leadership has gone through a massive makeover in the past year.

Elzey, paid more than $300,000 a year, was hired from The Citadel last year, where he was head of finance. By next summer, nine of the Orangeburg school’s 13 trustees also will be new, elected since last year.

The school’s previous president stepped down in 2012 amid controversy over his firing of several top staffers, a controversy that divided S.C. State’s board into acrimonious camps. Also, last year, a former board chairman was indicted on public-corruption charges.

Gov. Nikki Haley took the unusual step of hosting a meeting of S.C. State’s trustees last year in an attempt to get them to fix the school’s financial problems.

S.C. State learned it was “facing significant financial headwinds” this academic year when its enrollment fell to about 3,000, below the projected 3,500, according to the letter sent to state budget officials last week.

The school said it has worked to boost its enrollment, and asked its foundation and alumni association to contribute money to aid needy students.

Those moves helped bring the student body back up to 3,400. But that number still is well below the five-year-old enrollment figure of more than 4,800 used to set university spending.

To help cut its deficit, S.C. State has raised tuition and fees, cut 90 employees, delayed some new hires and shifted $500,000 in deferred maintenance costs to a federal program.

All those moves still left a $4.4 million deficit, the school said in the letter to state budget officials.

S.C. State has $71 million in debt, which the school described as “disproportionately higher than that of other institutions of comparable size.” The school budgeted $7 million this year just to pay interest on that debt, according to the letter.

Lawmakers said Friday that they want to help the school.

“Clearly, there may be some need for intervention,” said state Rep. Chip Limehouse, R-Charleston. “That’s a lot of money to get them out of hock. We don’t have the money, but we can’t let this school go under.”

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