Haley opposes new $12 million loan tor S.C. State
08/12/2014 11:18 PM
08/12/2014 11:20 PM
Cash-strapped South Carolina State University could receive another $12 million loan from the state during the next three years – a move opposed by Gov. Nikki Haley.
The loan, approved by a special legislatively appointed committee, would give the school $18 million in state loans. South Carolina State received a $6 million loan from the S.C. State Budget and Control Board, led by Haley, in May and June.
South Carolina State said it is working to pare a $13.6 million deficit in unpaid bills that date back to the beginning of its last school year. However, state budget officials say the university owes at least $18 million. South Carolina’s only historically black public college has struggled financially since the recession because of its shrinking enrollment, smaller state funding and fewer federal student loans.
Haley opposes lending more money until the school hires an outside financial consultant, one of the conditions set when S.C. State accepted the $6 million loan earlier this year.
“I don’t think one more dollar should go to S.C. State until they move toward that process,” Haley 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 State Budget and Control Board is supposed to hire the financial consultant, paying up to $500,000 of the original $6 million loan, S.C. State president Thomas Elzey said.
The $18 million in state loans will help S.C. State become financially stable, Elzey said. The school will seek another $50 million from lawmakers over the next five years to enhance its revenue-producing academic programs, such as those in nuclear engineering, to draw more students, he said.
S.C. State’s money problems and its ongoing administrative turmoil have landed it on probation with its accreditors, the Southern Association of Colleges and Schools. To stem the losses, S.C. State’s trustees hired Elzey, a career financial specialist, from The Citadel last year. Over the past three years, lawmakers also have replaced most of the Orangeburg school’s trustees.
But Haley said she wants solutions. “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 cleanup 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 turned 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, is examining S.C. State’s books and suggesting a path to financial stability. State Senate President Pro Tempore Hugh Leatherman, the Florence Republican who also is chairman of the Senate’s Finance Committee, put the group together.
The committee found S.C. State’s deficit is about $18 million – $4.4 million more than the school previously had disclosed. Part of the difference is because S.C. State needs to repay money that it borrowed from a university community group to help cover its previous shortfalls, state budget officials said.
The committee of college presidents suggested lending S.C. State $6 million by next June. Another $4 million would come during the state’s 2015-16 fiscal year and $2 million in 2016-17. The money could be taken from the state’s insurance reserve fund, state budget officials said. The loan would need approval from the legislative Joint Bond Review Committee and the State Budget and Control Board.
S.C. State trustees approved moving forward to seek the loan at a meeting Monday – with some reservations, Small said. Trustees do not know the terms of the loan, including its interest rate and payback deadline, he said. Elzey said the state and school could work out those details.
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