S.C. State University would not hold classes or athletics events for the next two years under a plan approved by an S.C. House budget panel Tuesday.
The plan, meant to the give the financially troubled school a “clean slate,” calls for closing S.C. State in July and firing its trustees, administrators, faculty and staff.
The school would reopen under new leadership in the fall of 2017. The 3,000 students at the state’s only historically black public college could get state scholarships to attend other S.C. public colleges or any historically black university.
The Orangeburg school has a $10 million deficit owed to food and maintenance vendors. Its enrollment also has dropped by more than a third since 2007 and just 14 percent of its students graduate within four years.
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“We are looking at a bankrupt institution,” said state Rep. Jim Merrill, the Berkeley Republican who heads the panel that recommended suspending operations at S.C. State. “No one takes any pleasure in recommending this.”
The proposal approved Tuesday is a long shot to pass the Legislature.
Suspending operations at S.C. State would require the proposal pass the full House and the state Senate, where the college has powerful advocates, including Senate President Pro Tempore Hugh Leatherman.
The Florence Republican is the architect of an ongoing recovery plan for financially troubled S.C. State. That plan included forming a panel of current and former S.C. college presidents to advise the school. That panel recommended a $12 million bailout of the school, approved late last year. S.C. State also received a $6 million loan from state budget leaders last year.
The House panel’s proposal does not address how the state would cover the costs of closing S.C. State temporarily, including paying off an estimated $100 million in bonded debt that the school owes.
Leatherman, who also leads the budget-writing committee in the Senate, said Tuesday that he was withholding judgment on the House proposal until he sees it. But he wondered if some S.C. State students might be left without a new school if the Orangeburg school suspended its operations. Even with state scholarships, some students might not qualify academically for admission to other schools, he added.
Even if the proposal to suspend operations fails in the Legislature, S.C. State is being damaged by it, school president Thomas Elzey said Tuesday.
“It’s damaging our ability to attract students and damaging our ability to raise money,” Elzey told The State. “It’s creating a problem for the university in the message that it sends.”
‘Unwillingness to make ... cuts’
The plan put forth by the House panel that oversees state funding of public colleges shows the growing frustration with S.C. State in the General Assembly, said Merrill, the panel’s chief.
House budget writers said they were frustrated the school sought $6 million from lawmakers this year to pay off last year’s $6 million loan. During a meeting with the panel last month, S.C. State leaders said they could not cut curriculum, faculty or athletics, Merrill said.
At that meeting. S.C. State administrators suggested $50 million in new state funding for the school over the next five years to improve its academic programs. The $50 million request lacked specifics, pushing panel members to a boiling point, Merrill said.
“There seems to be unwillingness to make the cuts that are necessary,” he said.
The plan would close S.C. State for the 2015-16 and 2016-17 school years. Students could get state-funded scholarships to attend other state public colleges or other historically black schools if they keep a 2.5-grade-point average, a mix of Bs and Cs.
The state would fire school administrators, trustees, faculty and staff under the proposal. Some employees at the Orangeburg school could reapply for their jobs when the school reopened, said state Rep. Phillip Lowe, a Florence Republican on the panel. The school employs about 1,000.
The state would assume responsibility for S.C. State’s debt. The proposal, known as a budget proviso, also would suspend the Bulldogs’ athletics programs.
The panel of current and former state college presidents currently advising S.C. State would develop a plan to reopen the school by Jan. 1, 2017, and start the process of hiring new leadership and faculty.
S.C. State would hold classes again in fall 2017.
“Hopefully, the school has a clean slate,” Merrill said. “It’s not the intention of the committee to wipe S.C. State off the planet.”
‘Simply a recommendation’
S.C. State’s accreditation remains an issue whether or not the House plan moves forward.
The school’s accreditation is on probation because of its financial, accounting and governance issues.
S.C. State would lose its accreditation if it closes for a year, said Belle Wheelan, president of the Southern Association of Colleges and Schools Commission on Colleges.
For S.C. State students, that could be a financial death blow. Students cannot receive financial aid at unaccredited schools.
Restoring accreditation after S.C. State reopened would take at least two years, Wheelan said.
The budget panel voted 3-1 to suspend operations at the school, a vote that broke along party lines. Republicans Merrill, Lowe and Garry Smith of Greenville favored the plan. Democrat Gilda Cobb-Hunter of Orangeburg opposed the proposal, though she has agreed steps need to be taken to fix the college’s budget.
Budget panel members said Elzey has not done enough to turn around the school’s financial fortunes since arriving in mid-2013 from The Citadel. He arrived in Orangeburg as lawmakers were replacing almost the entire S.C. State board of trustees.
S.C. State’s financial problems predate Elzey, stemming from the decisions by previous school leaders to borrow money to cover deficits for several years. Those deficits largely were the result of the school’s failure to cut its costs to match falling enrollment and cuts in state aid.
Gov. Nikki Haley, who has opposed giving S.C. State more public money until it has a financial plan, understands the frustrations of lawmakers, her office said Tuesday.
Haley heads the Budget and Control Board that loaned S.C. State $6 million last year. She is awaiting a consultant’s report on the school’s finances ordered as part of the loan.
“S.C. State’s leadership has been unable to provide straight answers on the condition of the school’s finances for months, something she finds totally unacceptable,” Haley spokeswoman Chaney Adams said.
Elzey drove to Columbia to speak with lawmakers Tuesday after hearing about the vote. Later, he held a news conference on the school’s Orangeburg campus to provide assurances to students, staff and alumni.
The school tweeted from its official Twitter account the phone numbers of the S.C. House and governor’s office, asking supporters to help fight the budget proposal.
“The university is encouraging all students, alumni, supporters and parents to remain calm,” the school tweeted. “The proviso is simply a recommendation.”
Suspending SC State?
Under a budget proposal approved Tuesday by a panel of the SC House, the state would:
• Close S.C. State for the 2015-16 school year; there would be no classes or sports also in 2016-17
• Fire trustees, administrators, faculty and staff. Halt athletics programs
• Allow current students to get state scholarships to attend other S.C. public college or historically black universities
• Assume the school’s debt, more than $100 million
• Working with a panel of current and former college presidents that is advising S.C. State, develop a plan by Jan. 1, 2017, to re-open the school in the fall of 2017