SC

S.C. State University Bailout Wasn’t Constitutional

$12 MILLION RAIDED FROM TAXPAYER FUND WITHOUT “CONSENT OF THE GOVERNED” 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…

$12 MILLION RAIDED FROM TAXPAYER FUND WITHOUT “CONSENT OF THE GOVERNED”

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 …

***

Related posts

SC

Gay Marriage: When Will SC Surrender?

FITSNews
SC

SC General Assembly: Costly, Continuing Negligence

FITSNews
SC

Taxpayers In South Carolina’s Impoverished Pee Dee Region Take Another Hit

Will Folks

43 comments

Clarendonian December 15, 2014 at 12:39 pm

“meaning it is money that should have been automatically rebated to taxpayers months ago.”

I disagree vehemently with the loan/grant/appropriation currently discussed. Enough money has been pumped into the bottomless pit in Orangeburg.

However, your BS about rebates is duplicative, redundant, and most egregiously, totally wrong. There is no such provision nor is there one that is workable imo.

Reply
RogueElephant December 15, 2014 at 12:48 pm

Politicians, (R)or(D) give money BACK to taxpayers ? HAHAHAHAHAHAHAHAHA I can’t take it HAHAHAHAHAHAHAHAHA Please stop you are killing me HAHAHAHAHAHA.

Reply
Power Corrupts December 15, 2014 at 12:53 pm

Can’t wait for Leatherman to meet his maker, or his fallen subordinate most likely.

The time is nigh Leatherman, you are no longer a spring chicken…

Reply
Hoe Hoe Hoe for Jonathan December 15, 2014 at 12:57 pm

Sure is nice that ole Jon. Pinson is getting to spend the holidays with his family. He is only convicted of ripping off SC State, by default the taxpayers of SC that continually fund the excesses and abuses. The headlines look real pretty, but the dust settles, and the criminals who were smart enough to hide the cash seem to land back in business pretty fast! Our government puts money in the reach of these criminals and then the money disappears.

Reply
Nölff December 15, 2014 at 1:22 pm

I’m a white-ass honkey. (See…. We can call each other the H-word, But you can’t because you’re not white like we are)
If I can’t go there, I don’t want to pay taxes for it.
It’s racialist.

Reply
The Colonel December 15, 2014 at 1:40 pm

You can go there – SCSU is 3% white. (Benedict is 1%, NC A&T is only 87% black)

Reply
Rocky December 15, 2014 at 1:40 pm

What if your tax dollars keep them from oggling your daughter in the Horse Shoe in September / October / April and May.

Reply
The Colonel December 15, 2014 at 1:28 pm

The time for HBCU’s has come and gone. They are artificial worlds where students generally receive a marginal education from a largely homogeneous instructional staff and they assume the real world will be just like that.

There are exceptions to my assertion, SCSU is not one of them.
86% of the freshman class scored below 900 on the SATs
ACT scores average about 15.
55% of the incoming freshman had below a 3.0 GPA
No other public university in SC would accept students with that level of academic achievement.
SCSU’s “six year graduation rate” is 35% (USC’s is 73%, Clemson’s is 83%)
By way of comparison, NC A&T has significantly higher admission standards and a significantly higher 6 year graduation rate at 43%

Reply
Tazmaniac December 15, 2014 at 1:31 pm

And just where

Reply
The Colonel December 15, 2014 at 1:39 pm

I’m doing my best to keep my mouth shut on this one…

Reply
shifty henry December 15, 2014 at 2:09 pm

It used to be “if you want a job with the Post Office you went to Benedict College”…

Reply
Tazmaniac December 15, 2014 at 3:14 pm

It’s not like the CIA is recruiting at those places.

Reply
Rocky December 15, 2014 at 1:39 pm

Colonel – you know they want to keep SCSU open – to keep the pressure of white students want to attend USC. Jokes aside, you’re correct. Take a look at Edward Waters College in Florida – barely afloat.

Reply
The Colonel December 15, 2014 at 1:47 pm

SCSU is not unique – HBCUs all over the country are struggling to stay afloat.

Obama’s “help” isn’t helping: http://www.theroot.com/articles/politics/2013/09/hbcu_fiscal_crisis_is_difficult_to_solve.html

The economy’s killing them: http://www.higheredmorning.com/are-black-colleges-about-to-sink

Black students are choosing to go elsewhere (enrollment is down 47% nationally): http://www.npr.org/blogs/codeswitch/2013/06/25/195666060/are-hbcus-in-trouble-an-evergreen-question

Reply
Soft Sigh from Hell December 16, 2014 at 8:39 pm

A HBC at Harbison is now the site of a Midland’s Tech campus isn’t it? It is hard to think that good and honest minds (though where would we find them?) can’t transform what is now dysfunctional SCSU into a more productive and useful state asset, no matter whats its eventual name and affiliation.

Reply
The Colonel December 16, 2014 at 8:50 pm

It would require a huge change in attitude and personnel. SCSU has an ingrained mission of supporting a specific population at the expense of everything else.

Soft Sigh from Hell December 16, 2014 at 7:10 pm

How does SCSU compare to, say, Francis Marion U., a fairer comparison?

Reply
The Colonel December 16, 2014 at 7:48 pm

Hmmm,
FMU is slightly larger and generally operates on a sound financial basis.
SATs – FMU is right at 1,000 for an average (20 ACT)
GPA – 88% of incoming freshman have better than a 3.0 at FMU
Six year grad rate is 41%

Interestingly enough, FMU is 50% black.
FMU is something of a gateway school, a number of entering freshman will finish their degrees elsewhere but they started at FMU because of cost and lower admission standards.

Reply
Soft Sigh from Hell December 16, 2014 at 8:33 pm

“FMU is something of a gateway school, a number of entering freshman will finish their degrees elsewhere but they started at FMU because of cost and lower admission standards.”

USC’s regional campuses seem to play that useful role too.

Reply
The Colonel December 16, 2014 at 8:37 pm

As do our “tech schools”. FMU has a bridge program with Clemson for “wanna be” engineers. Midlands and Tri County Tech have bridges to USC and Clemson. The bridge programs are more formal than “just starting” somewhere else and have huge financial benefits if handled properly.

Elliott December 15, 2014 at 1:30 pm

It truly is a joke. A nameless, faceless committee NOT issuing reports, but determining how millions of tax dollars are to be spent. Appropriating money? Loaning money? Granting money? Who the hell knows.
One thing is for sure. The main stream media is not working this story. What does that tell you? They love Leatherman’s total control of SC State government. it makes things easy for them.

Reply
James December 15, 2014 at 1:32 pm

This does not make sense. how can Nikki Haley let this happen? Why did she not veto it?
Giving millions of dollars to a failing institution is a bad thing.

Reply
no way December 15, 2014 at 2:00 pm

You seriously believe that Haley, who obviously has her sights set on a federal office, would veto funding for a black university? Why last week when she headed the meeting to vote on how to fund this she abstained rather than vote yes or no! Did you hear what I said? The governor, the “leader” of our state, abstained from a vote on a board which she chairs.

So much for “leadership”.

Reply
Bible Thumper December 15, 2014 at 3:03 pm

Be a little fair. You don’t mention the ones who voted for it.

Reply
Peter O. December 15, 2014 at 3:46 pm

Eckstrom was the only vote against it. Haley refused to vote.

Reply
Bible Thumper December 15, 2014 at 4:27 pm

That means Loftis, Leatherman and White voted for it. Also the vote was not to approve funds/loan but to identify the account source i.e. the Contingency Reserve Fund.

Staffer December 15, 2014 at 4:47 pm

Yes, the B and C voted only to approve the source of the vote.

The General Assembly voted to give the Blue Ribbon Committee the right to appropriate the money.

Bible Thumper December 15, 2014 at 4:54 pm

The Constitutional Issue:
The Blue Ribbon Committee will report their findings to the committees of the House and Senate. I suppose if they approve they send a joint letter to Treasurer Loftis directing him to disperse the funds. No one else would have to approve.

Karen December 15, 2014 at 4:59 pm

That is how I read it. But how can an unnamed group order funds dispersed from the treasury?

I would like to know what other “unnamed groups” order money from the treasury???

Staffer December 15, 2014 at 4:50 pm

B and C vote was only to choose which bank account to use, and this was required by law. Please understand the General Assembly delegated the appropriation of funds to the Blue Ribbon Committee, which then delegated it to the working group.

Reply
Duce December 15, 2014 at 6:36 pm

“B and C vote was only to choose which bank account to use, and this was required by law”

This is what makes Haley’s decision to abstain even more repugnant.

Staffer December 15, 2014 at 4:51 pm

Loftis and Eckstrom-and Haley- all spoke out against it.

Reply
Rocky December 15, 2014 at 3:04 pm

Yeah, she’s always planned to have Tim step aside at the appropriate time – but will he? Damn!!!!

Reply
Bible Thumper December 15, 2014 at 3:01 pm

Not sure Haley had anything to do with it.
http://www.postandcourier.com/article/20141208/PC1603/141209507/1031/state-to-dig-into-emergency-cash-for-sc-state-bailout

COLUMBIA – Calling it “irresponsible,” Gov. Nikki Haley abstained Monday from joining other state officials in approving a $12 million bailout over the next three years for South Carolina State University.
The state Budget and Control Board voted 3-1 to tap into a contingency fund for the second round of aid this year for the state’s historically black public college. State Comptroller General Richard Eckstrom dissented, while Haley abstained from voting.
“For the record, I disagree that we’re doing this,” Haley said at the meeting. “I really just think it would be completely irresponsible for us to do this at this time.
“If you ask me, they just gave the money away because they know it can’t be paid back, and they did it without knowing anything about the school – where it’s going, where it’s come from or how they’re to go about fixing it,” she added after the meeting.

Reply
Peter O. December 15, 2014 at 3:46 pm

Haley had no power to veto the loan (she did vote against it in the meeting last week), since it was done outside the normal budgeting process as Will noted.
The only thing she could have done was veto the entire “blue ribbon committee” this spring before it could recommend the “loan,” but that certainly wouldn’t have looked good in the public eye. Hugh Leatherman knew what he was doing.

Reply
Point of order December 15, 2014 at 7:44 pm

“Giving millions of dollars to a failing institution is a bad thing.”

If that were the case, then the SC gov’t would cease to exist.

Reply
Guest December 15, 2014 at 2:21 pm

40 Acres and a mule.

Reply
Marvin December 15, 2014 at 2:54 pm

How pathetic it is that State Government can send millions to a school and no one has to vote for it. They only voted odor a committee to study and recommend.

What cowards are in the General Assembly. Appropriation by backdoor.

Filthy lazy cockroaches.!

Reply
Mitch December 15, 2014 at 4:53 pm

Does anyone know the names of the “working group” that appropriated the funds? The “working group” was appointed by the Blue Ribbon Committee, which was appointed by the General Assembly.

So screwy it makes Washington DC look sane.

Reply
Bible Thumper December 15, 2014 at 5:21 pm

It has not been formed as of 12/08/2014.

Reply
Bible Thumper December 15, 2014 at 5:18 pm

The Blue Ribbon Advisory Committee

If Sen. Hugh Leatherman’s proposed amendment becomes part of next year’s budget, the S.C. State Blue Ribbon Advisory Committee will be working with S.C. State University President Thomas Elzey and the board of trustees to develop a budgetary plan for the institution.

Committee members will be James F. Barker, former president of Clemson University; Dr. Harris Pastides, president of the University of South Carolina; former S.C. Supreme Court Chief Justice Ernest A. Finney, former interim president of South Carolina State University; Dr. Luther F. Carter, president of Francis Marion University and former S.C. Court of Appeals Chief Judge Alex Sanders, former president of the College of Charleston.

But I have read reports that Katon Dawson is also on the committee

Reply
No More Mr Nice Guy December 15, 2014 at 5:49 pm

“The General Assembly can do as it pleases.” —- S.C. Senate president Hugh Leatherman. ( The old cantankerous sack of shit will have a hard time adjusting to prison life ). They do illegal shit like this, they need their nut sacks cracked. I want federal criminal charges. And I want them right now against all of these POS.

Reply
kd December 15, 2014 at 9:44 pm

Des people in legislature bees drinking booze and smoking crack. Why else would somebody be doing such stupid stuff?Des people need hep. A fool knows better than to treat money like dis.

Reply

Leave a Comment