SC State asks for $23.5 million to erase its deficit
South Carolina State University’s leader asked a state Senate panel Tuesday to give the financially troubled school all of the $23.5 million that it needs to eliminate its deficit.
“We want to be made whole,” acting President Franklin Evans told the panel. “We are pleading, begging and asking for assistance.”
The state’s only historically black public college received only a fraction of that amount – $1.1 million extra – in the House budget approved earlier this month.
South Carolina State should not expect to get the money to pay off its deficit from the Senate either, a Senate leader said Tuesday.
“I would hate to guesstimate what we may or may not do, but $23.5 million, the chances of receiving that would be slim,” Senate Education Committee Chairman John Courson, R-Richland, said after the hearing.
Evans said not getting the money “would be devastating to the institution.”
South Carolina State is struggling after years of failing to cut its budgets to match its shrinking enrollment. Enrollment has fallen by 40 percent since 2007 because of cuts in federal financial aid programs and the 119-year-old school’s budget and administrative turmoil.
Trustees fired President Thomas Elzey last week. Meanwhile, state lawmakers tentatively have passed bills to remove the Orangeburg school’s entire board.
South Carolina State also is fighting to keep its accreditation, as it was placed on probation last year because of its financial and governance problems.
Courson said losing accreditation, which would halt federal financial aid for students, would be more devastating to the school than not getting enough state money to erase its deficit. A review committee is visiting S.C. State next month and is expected to vote on the school’s accreditation status in June.
“If they fail that, they are at risk of closing,” Courson said.
Evans, who was not in charge of S.C. State when the school pitched its spending plan to the House in January, acknowledged the school's troubled financial situation before Senate budget writers.
“I assume I'm expected to sit in the hot seat,” Evans joked as he took a chair before a Senate budget panel.
Then, Evans asked for the $23.5 million needed to eliminate the school's anticipated deficit as of June 30, according to a state-funded audit released last week.
That deficit now stands at about $16 million, which includes more than $10 million in unpaid bills and a $6 million state loan. However, the school’s unpaid bills are expected to mount through June 30, when the state government’s budget year ends.
The House’s budget proposal would give S.C. State $4 million to pay off bills, but it also took away another $2.9 million in other funding.
S.C. State has worked to trim its staff and faculty costs, Evans told senators.
Employment has fallen by 15 percent to 692 in the past year. Full-time faculty, which fell from 199 to 175 over the past year, could drop to 150 when classes start in the fall.
The school has sliced nearly $1.2 million in employee salaries this year and plans to save another $1.4 million with planned faculty cuts.
Evans also said the school has cut some academic programs, but he did not give details to the Senate panel.
The Legislature is considering bills that would allow S.C. State to furlough workers temporarily this year. The school has said it could save more than $700,000 by having employees take seven business days of unpaid leave.
South Carolina State expects its enrollment will keep shrinking next fall, Evans said.
The school projects it will have 2,650 students on campus in August – down from 2,990 this spring and 3,300 last fall. Evans blamed that expected drop on better financial aid packages offered prospective students by larger schools and media attention to S.C. State’s ongoing struggles.
Two African-American state senators Tuesday said S.C. State needs the $23.5 million it requested from state budget writers to move forward.
“This is not so S.C. State can save face,” said Sen. Darrell Jackson, a Richland Democrat who sits on the budget panel. “This is about South Carolina as whole because there are students who need to be at S.C. State.”
What’s next for S.C. State?
▪ The General Assembly is weighing requests for more money from the college, including an added $23.5 million to erase its entire deficit.
▪ Bills that would oust the school’s board and allow the university to temporarily furlough employees await final approval in the Legislature.
▪ The college’s accreditation, placed on probation last year, will be reviewed by regulators next month. An accreditation vote is set for June.
This story was originally published March 24, 2015 at 9:32 PM with the headline "SC State asks for $23.5 million to erase its deficit."