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S.C. State University Bailout Wasn’t Constitutional




By FITSNEWS || Last week this website posted an item on the latest taxpayer-funded bailout of S.C. State University – a historically black college that (like the rest of our state’s bloated higher education system) should have been set free to pursue its destiny in the private sector years ago.

Seriously … taxpayers have no more business subsidizing these failing “higher ed” bureaucracies than they do the bubbles keeping them in business.

As for S.C. State, though, the mechanism by which it received its latest bailout is now raising questions.  Specifically, there is growing concern the budget proviso which enabled the bailout is unconstitutional – not to mention a gateway to similar “off-budget” arrangements at other bureaucracies.

Under the terms of its first bailout of the troubled school, the S.C. General Assembly created an “advisory group of secondary education professionals” to oversee S.C. State’s so-called return to fiscal stability.  Operating in concert with this advisory panel was a “working group” that was tasked with diving deep into S.C. State’s fiscal situation and making specific spending “recommendations.”

“The proviso gave the advisory group the authority to expend money, but not an amount, and certainly not a limit,” a source familiar with the process tells FITS.

The expenditure power was left to the “working group.”

How is any of this consistent with good budgeting practices?  It isn’t …

S.C. Treasurer Curtis Loftis – the guy who has to stroke the checks for all this – asked at a recent budget meeting who was going to sign off on the latest $12 million “loan” for S.C. State.  Specifically, he directed his question to S.C. Senate president Hugh Leatherman – the driving force behind the S.C. State bailout.

Leatherman’s response?

“The General Assembly can do as it pleases,” he said.

Translation?  This isn’t a loan – it’s an off-budget line item.  One that was never subjected to the scrutiny of the budget process – and one which was never voted on by the people’s elected representatives.

“In the proviso there is a lot of goofy, nonsensical talk about the need for budgetary plans, balanced budgets, cash flow statements et cetera, but the proviso is not bound to standard definitions as one would expect,” a source familiar with the process tells FITS.  “The bottom line is Leatherman now owns S.C. State.  Through his proviso and the puppet blue ribbon committee it created, he can give the school millions, or withhold it.  He has done so through a mechanism that is an example of poor governance at best, and unconstitutional at worse.”

The biggest problem with the “loan?”  It comes out of a surplus fund – meaning it is money that should have been automatically rebated to taxpayers months ago.

The other problem?  The new university “debt” isn’t included in the state’s “balanced budget.” It was simply taken from the surplus fund – meaning it doesn’t show up with the rest of S.C. State’s annual appropriations and obligations.

It just “appeared …” and then vanished.

This website has consistently argued that surpluses and savings should be immediately sent back to taxpayers – an idea that’s been repeatedly shot down by liberal “Republicans” in the S.C. General Assembly.

Why?  Because otherwise crap like this happens …