SC State needs $13M to pay bills through June

COLUMBIA, S.C. (AP) - The chairman of the House budget-writing committee said Wednesday that the state will address South Carolina State University’s $13 million cash flow problem.

How - and how much - are still in question.

Ways and Means Chairman Brian White said the state has an obligation to the university’s roughly 3,400 students. SC State is South Carolina’s only public historically black university.

“We owe it to them,” White, R-Anderson, said on the House floor. “It’s really important that we give some hope and security to those kids at SC State right now, so they know they’re taken care of.”

White’s comments came after he and other budget officials received the university’s eight-page deficit recovery plan.

A $4 million deficit is expected at the end of this school year, down from an initial projection last summer of $15 million, according to the report. The school’s plans to address the remaining deficit next school year involve enrolling more students, increasing fundraising, and eliminating programs that either have very few students or don’t graduate students.

But the school is requesting help covering what it calls an immediate cash deficiency of $13 million needed to pay bills and loan payments through the end of June.

There is no timetable for a decision from the five-member Budget and Control Board, which includes White.

State and university officials were meeting Wednesday on the Orangeburg campus to discuss the next steps.

A university spokeswoman did not immediately return a message from The Associated Press.

According to the report, the financial woes stem from last summer, when the university expected about 3,000 students to enroll, rather than the 3,500 it had budgeted for, resulting in that initial deficit projection of $15 million. But then 3,400 actually enrolled for the fall, reducing the deficit to $9 million. Other actions taken since last fiscal year - including increasing tuition and fees, eliminating 90 positions and additional fundraising - further reduced the deficit to $4.4 million, which should stand at $3.9 by fiscal year’s end. The plan is for a balanced budget next school year, the report says.

Still, it continues, the school needs help covering its $13 million “critical cash shortfall.”

“South Carolina State University is facing significant challenges that were inherited by the current administration and is on the road to recovery from its recent financial issues,” the report’s opening line reads.

Despite the university’s declining enrollment issue - down from 3,800 students in 2012-13 - its plans for financial stability rely on enrollment increases, with a projection of 3,740 students starting this fall, and yearly increases that reach 4,200 students in fall 2018.

The school needs an estimated $12 million over the next four years, through June 2019, to pay for recruitment and retention initiatives allowing it to move forward, the report says.

Later Wednesday, the Ways and Means Committee approved creating a “deficit-monitoring team” for SC State. The proposal, included in the committee’s budget plan for 2014-15, calls for the team to work with college officials to ensure SC State is financially sound by the end of the fiscal year. A report must be turned in to lawmakers no later than Dec. 15. The university would be mandated to abide by the team’s directives.