As South Carolina State University President Thomas Elzey made his pitch for a state bailout Wednesday, he was questioned about whether he has the support needed to correct the institution’s financial problems.
S.C. State had 10 presidents in its first hundred years, Sen. John Courson said during a meeting of the Senate’s Higher Education Budget Subcommittee.
“For the last 10 years, I think we’ve had nine, including interim presidents, which indicates instability and disorder in the government component,” the Columbia Republican said.
This is something the General Assembly is concerned about, he said. “One would hope if you get it straight that you plan on staying there for a while.”
Courson, who chairs the subcommittee, showed his support for the university by giving Elzey a personal check for $1,000.
Elzey met with both the subcommittee and the State Budget and Control Board in his effort to find $13.6 million to pay the institution’s bills through June. He has reported that the university has some vendor bills past due for 90 days or more.
By April, services will be cut off in some areas and students will feel the pinch, he said.
Elzey told the Budget and Control Board, “Our situation is pretty difficult.
“If we do not receive some form of assistance in the next month or so, it will put us in a very difficult position.”
However, Elzey noted that funds are available for the payroll through June.
The best choice for the university would be an appropriation, he said. A loan would put the institution into a very precarious position and would have an impact on its accreditation through the Southern Association of Colleges and Schools.
If the assistance in either form is forthcoming, the university will be very transparent and will make timely reports on the funds, Elzey said.
“We will let you know if there is a problem,” he said.
Elzey also promised legislators a balanced budget for 2014-15.
“Next year, we will operate on what we take in,” he said.
Gov. Nikki Haley said that poor financial decisions by the university cannot continue.
“We have to make sure whatever we do, we don’t fall into that same trap again,” she said. “We can’t paint over it and say, ‘Oh, if we get this money it’ll fix everything.’ I don’t think that’s the case.”
Comptroller Richard Eckstrom suggested bringing the university under the state’s accountability system. He also said that the question of assisting the university must be decided by the legislature.
Elzey, who took over leadership of the university on June 15, said he agreed with Haley that some very poor choices were made in the past.
“When I walked in the door, I found there were a huge amount of things that were kept under the table,” he said.
The university’s financial problems came about for various reasons, including a 49 percent reduction in state funding over the past few years. But a steady decline in enrollment was the main problem.
However, the university didn’t have an admissions director or a financial aid director to deal with the problem, Elzey said. He had to put vice presidents in place to deal with the problem.
He also hired a vice president to do fund raising and a communications director. That has led to a large increase in donations. Additionally, applications are up by 50 percent over this time last year, he said.
He and Chief Financial Officer James Openshaw are working very hard to meet all the challenges, Elzey said.
“We accept responsibility for what we need to do and how we need to do it,” he said.
Sen. Hugh Leatherman, head of the Senate Finance Committee, asked Elzey what made S.C. State different from the other state education institutions that also lost funding, but handled their finances much better.
Elzey noted that 97 percent of the university’s students qualify for some form of need-based financial aid. Additionally, criteria for getting Pell Plus loans have changed and the number of students getting those loans has decreased by 50 percent.
Leatherman, a Florence Republican, said that over the past three decades at least three S.C. State presidents had appeared before the board asking for money. He questioned how Elzey would show he will do better at handling the university than the presidents that came before him.
“No one has ever been more supportive of South Carolina State than me,” he said. “But I’m at the point now of where I’m not sure what to believe.”
Leatherman also asked Elzey how he’d handle the situation if the assistance didn’t come through.
Elzey said he’d have conversations with the vendors.
“What it comes down to is folks want to get paid,” he said.
He also noted that downsizing could occur if the anticipated enrollment increase doesn’t come through.
Elzey said he has other possible actions under consideration that he isn’t ready to speak about at this time.
Rep. Brian White, head of the House Ways and Means Committee, said he has concerns about how the university would pay the bill if the assistance came in the form of a loan.
But the Anderson Republican said his main concern is supplying a quality education to students who have committed their education to S.C. State.
“They made a commitment and we need to make a commitment too,” he said. “We as a state and a board need to guarantee them that education.”
Haley noted that the S.C. State Board members and the delegation did not attend the Budget and Control Board meeting. It made it appear that they are not supportive of the president. Additionally, the delegation is divided, she said.
“That’s the issue we all have,” she told Elzey. “I’m concerned for you. It doesn’t look as if they’re going to have your back.”
Sen. John Matthews, D-Bowman, noted that he was at the Finance Committee meeting.
“I thought the president made a good case,” he said. “It was logical and showed why the university is having a shortfall.”
According to Matthews, every member of the Orangeburg County delegation is 100 percent behind S.C. State.
“We’re going to do what we can to make sure that S.C. State College comes out of this in a fashion the university and the students can be proud of,“ he said. Matthews graduated from S.C. State before it became a university.
Matthews said he’s confident that the General Assembly will provide assistance to the university.
There are several options the legislature can take, he said.
“At this point, we’re looking at what those options are. We’re trying to build a consensus,” he said.