The Buzz

April 24, 2014

SC State still does not know if $13.6 million bailout is coming

The Buzz

A blog from The State's political team of Cassie Cope, Jamie Self and Andy Shain. Email tips to

S.C. State University is still awaiting word from state budget leaders whether they will give the state's only historically black public college a $13.6 million bailout, school president Thomas Elzey said Thursday.

The school will run out of money next month, said Katon Dawson, a S.C. State trustee who chairs the budget committee.

"I cannot tell you where the revenue stream is coming from," he told fellow trustees at a meeting Thursday. "We have no hidden money."

The school has about $1.5 million cash in hand. Payroll is $2.6 million in April, Elzey said.

Dawson asked trustees to try to convince lawmakers in Columbia to help with the shortfall and called next week's Budget and Control Board meeting very important to the school.

"These are the most crucial 60 days for any university in the past seven or eight years," Dawson said.

Elzey told trustees however, that he does not know if the school's financial issues are not on the agenda of the Budget and Control Board's meeting next week.

The board, that includes legislative budget leaders and chaired by Gov. Nikki Haley, could provide a loan to the university to pay vendors -- some of whom have not been paid since August, according to school officials.

The school has $6.1 million in unpaid bills.

"We don't know the timetable for a decision," Elzey said. "Our situation is urgent."

The governor's office said it has proposed discussing S.C. State at next week's budget board meeting. An agenda has not been posted on the board website.

News of S.C. State's cash shortfall became widespread at the end of January when state budget officials shared a request for a deficit-reduction plan with lawmakers.

The Orangeburg school has one unnamed major vendor who threatened legal action soon, he said, Meanwhile, food vendor Sodexo released $1.3 million in commissions withheld because of $2.3 million in unpaid bills. The money was used to help make payroll for S.C. State's 1,045 employees.

"We owe them money, and they gave us money," Elzey said of Sodexo.

Most vendors have agreed to keep providing services on campus with the promise of state aid arriving, Elzey said.

S.C. State can no longer access state money given to a program that aids poorer communities that has helped keep the school out of the red in recent years.

A state Inspector General's report issued this month found the university owed $6.5 million diverted from the school’s 1890 Research & Extension Program to cover previous deficits. The program money was used as recently as January.

To save costs, the school has cut 90 positions and could trim more part-time jobs, Elzey said. S.C. State has ended non-essential mobile phone use. The university has a hiring freeze though the school is adding staff who can help build revenue, such as a director for online academic programs.

Elzey said the school's faculty numbers have remained steady during a period when enrollment has dropped by more than 25 percent.

"We don't want the cuts, but we know likely they will come," Faculty Senate President Thomas Cassidy said at the board meeting.

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