IT DOESN’T take a certified public accountant to know that S.C. State University can’t dig out of its deep deficit if it has to repay millions of dollars in state loans as well as waiting vendors.
So state leaders should acknowledge that a recently approved $12 million loan to the university is really a grant. Better yet, it’s an appropriation to a state-owned college that long has struggled in part due to financial neglect and poor oversight from state leaders. While we’re at it, the $6 million loan that S.C. State got earlier might end up in the allocation category as well; it’s abundantly clear the university can’t repay it.
But while the state should offer financial help, a bailout alone isn’t enough. S.C. State has long-term, chronic problems that won’t go away with mere money.
As we have said repeatedly, S.C. State must undergo a top-to-bottom examination — from its board and administrative leadership to its financial practices and management to its core academic functions — so that it can reposition itself in a manner that ensures it will be around for generations. While some believe the decline in student population that has hit S.C. State — and other colleges — might reverse itself, it may never come back completely. S.C. State must explore ways to deal with this new reality.
With the decision to grant S.C. State this much-needed money, lawmakers and school leaders are duty-bound to produce a plan that outlines long-term changes to get the university firmly on its feet.
This latest saga began when S.C. State acknowledged it had a deficit and sought state help. State budget leaders loaned the university $6 million to pay bills, but the money was consumed by payroll and debt payments. Although the school’s board made some budget cuts, they weren’t enough to overcome years of failing to reduce spending sufficiently while enrollment shrank and state funding dipped; S.C. State still has more than $7 million in unpaid bills to vendors that date back about a year.
A group of former and current S.C. college presidents tasked to help the S.C. State board of trustees find solutions recommended the $12 million loan, which was approved by legislators on the Joint Bond Review Committee. The Budget and Control Board approved the money on Monday. S.C. State will receive it in installments through 2016-17, as long as it avoids a deficit in its current year budget.
Gov. Nikki Haley expressed understandable dismay over the loan, saying the panel of lawmakers OK’d it “without knowing anything about the school — where it’s going, where it’s come from and how we’re going to fix it.” She noted that an audit of the school that started in October has yet to be completed. A case can be made that the loan shouldn’t have been extended before the audit was completed.
But we all know the audit’s not going to be glowing. S.C. State is in crisis. What will its board and South Carolina’s leadership do about it? So far, all they’ve done is attempt to plug a budget hole. We need long-term fixes.