Cash-strapped S.C. State University could receive another $12 million loan from the state over the next three years -- a move opposed by Gov. Nikki Haley.
The advance approved by a special legislatively appointed committee would give the school $18 million in state loans. S.C. State received a $6 million loan from the S.C. Budget and Control Board, led by Haley, in May and June.
S.C. State said it is working to pare a $13.6 million deficit in unpaid bills that date back to the beginning of the school year, though state budget officials said the university might owe more. South Carolina’s only historically black public college has struggled financially since the recession with shrinking state funding and enrollment.
Haley opposes lending more money until the school hires an outside financial consultant that was required when S.C. State accepted the $6 million loan earlier this year.
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“I don’t think one more dollar should go to S.C. State until they move toward that process,” she said Tuesday. “To continue to give them money is buying time. To get financial consultants in there is teaching them how to clean up the mess that’s there.”
The money problems along with ongoing administrative difficulties have landed S.C. State on probation with the Southern Association of Colleges and Schools. The school hired a new president last year, and lawmakers have replaced most the trustees in the past three years.
Haley said she wants solutions sooner.
“I’m very concerned about the morale at the school. I’m concerned about the board members at the school,” she said. “I’m concerned about the slowness of how this is moving. This is an urgent situation where we need to get clean-up people in there right away.”
The school remains viable, S.C. State trustees chairman William Small said, but needs time to fix its problems.
“We're not a basket case, but I’m concerned that we don’t become a basket case by those who want things turn around in a matter of minutes,” Small said. “We didn't get here in a minute, and we’re not going to get out of this in a minute.”
A legislatively appointed committee of current and former state college presidents, including University of South Carolina President Harris Pastides and former Clemson University President Jim Barker, was tasked to examine S.C. State’s books and suggest a path for financial stability. Senate Finance Committee Chairman Hugh Leatherman, R-Florence, put the group together.
The committee found that S.C. State’s deficit stands at about $18 million -- $4.4 million over what the school has announced. S.C. State needs to repay money borrowed from university community group to help cover previous shortfalls, state budget officials said.
The committee of college presidents suggested lending S.C. State $6 million by next June. Another $4 million will come in 2015-16 and $2 million in 2016-17. The money could come from the state’s insurance reserve fund, state budget officials said.
S.C. State trustees approved moving forward to get the loan at a meeting Monday with some reservations, Small said. Trustees do not know terms of the loan, including the interest rate and payback deadline, he said.
The board also has concerns about the school remaining autonomous with so much debt owed to the state as well as the loans raising red flags with accreditors who already have S.C. State under a microscope.
“We are grateful for the overture and the help,” Small said. “But we want to be mindful of our ability to repay this debt and remain independent and satisfy what we need to do as an institution.”
Trustees approved cuts, including seven-day employee furloughs, to get a balanced budget this month that was based on an expected slight bump in enrollment over last year. Small said he does not want to take away more money from the school.
“I do not want to have any more conversations about cuts without discussions about financial stability going forward,” he said. “I do not want to cut S.C. State into oblivion.”