COLUMBIA, S.C. (CBS Atlanta/AP) — Continued questions over South Carolina State University’s ability to get its finances in order prompted a House budget-writing panel to propose temporarily closing the state’s only public historically black college.
While the idea prompted a firestorm of debate, it appears doomed. Even if it eventually makes it into the House’s budget proposal, Senate leaders have made clear they won’t go for it. Still, the stunner points to lawmakers’ rising frustrations.
The proposal “has sent shockwaves throughout this university community. It has incited worry and panic,” said University President Thomas Elzey, who took the school’s helm in mid-2013, in a statement late Tuesday. “I want to make one thing clear. SC State will not close.”
It’s time to stop “messing around the edges” of South Carolina State University’s financial problems, said Rep. Jim Merrill, R-Charleston, chairman of the panel that advanced the idea to the full Ways and Means Committee.
Under his panel’s proposal, the university founded in 1896 would undergo a massive reorganization during a closure of at least one year. Meanwhile, the state would take on the university’s debts, though how much exists is uncertain. The desperate measure stems from lawmakers’ inability to get concrete answers on what the school owes, combined with college officials’ unwillingness to make deep cuts to reach solvency, Merrill said.
South Carolina State is digging out of a hole created by years of declining enrollment, along with a drop in state funding and federal changes that made many students ineligible for grants. Despite the fall-off in revenue, the school continued to spend as if nothing had changed, Elzey has said.
Last month, he told the panel the university owes $17.5 million. That doesn’t include outstanding bonds or the bulk of a December state bailout. It does include $10 million in unpaid bills — which began accumulating in fall 2013 — and a $6 million loan state lawmakers gave last spring to pay off the oldest bills and keep the university afloat. The university is supposed to pay that money back this year but can’t.
Part of the $14 million Elzey sought in the state’s 2015-16 budget would pay off that debt to the state.
“The $6 million was kicking the can down the road,” Merrill said. “We’ve got to stop it now.”
His panel’s proposal offers current students four years of state-paid tuition at any public college in the statethey can get into. That’s a much better deal than if the school goes out of business, Merrill said. But getting accepted could be a problem. The students’ average SAT score is 830, according to the university.
Merrill said his panel’s “more than willing” to listen if university officials come up with what’s deemed a true solvency plan.
The school’s current plan relies on climbing enrollment, though enrollment continues to decline, with about 3,000 students starting this semester, down 300 from last fall and 800 from fall 2012.
The negative attention and probationary accreditation status due to the school’s fiscal problems are causing students to go elsewhere, Elzey has said. Just 14 percent of freshmen are graduating from the school within four years.
The school intends to enhance some programs, while scaling back — but not eliminating — others, despite declining interest. The board has suspended women’s golf to save money but refused to cut basketball, Elzey said last month.
But that’s the kind of thing the school must do to get serious about its fiscal woes, Merrill said. His panel also proposed suspending SC State’s athletics, as a back-up plan.
Senators made clear Tuesday they don’t support the more drastic proposal.
“I don’t know how you do that,” said Senate President Pro Tem Hugh Leatherman, R-Florence, who’s also Senate Finance chairman. “I want to make sure we understand that’s rumbling across the hall and not on our side.”
It’s because of Leatherman’s backing the school received a second bailout in December of $12 million over three years.
But Sen. John Matthews said even the threat causes substantial damage to his alma mater’s image — and its ability to ever recover.
“It’s probably the most irresponsible thing I’ve seen come out of the House,” said Matthews, D-Bowman.
Gov. Nikki Haley’s spokeswoman said the Republican governor understands the panel’s frustration but did not comment on the specific proposal.
“South Carolina State’s leadership has been unable to provide straight answers on the condition of the schools finances for months, something she finds totally unacceptable,” said spokeswoman Chaney Adams.
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