State considers cutting even more from spending on colleges and universities

Higher education spending in South Carolina will drop to roughly 1995 levels if the state trims roughly 3 percent from what it spends on colleges and universities.

Earlier this month, state economists said South Carolina needs to pare spending by $120 million, a roughly 3 percent cut for all state agencies.

For colleges and universities in South Carolina, it's another Yogi Berra moment. Schools are learning that it is, as the former New York Yankees manager famously said, "Deja vu all over again."

State lawmakers cut colleges and universities disproportionately last budget year -- by 24 percent.Colleges also endured multiple across-the-board cuts, as lawmakers were forced by a tanking economy to pare more than $1 billion from a spending plan passed in June 2008.

If, as expected, the State Budget and Control Board approves another across-the-board cut later this year, colleges and universities will face their third budget cut since June.

For the University of South Carolina system, that would be about $4.9 million, said William "Ted" Moore, USC's chief financial officer and its vice president for planning and finance.

A 3 percent cut would be about $4.1 million less for USC's Columbia campus, Moore said.

College officials across the state anticipated this spending reduction, but that doesn't mean coping with it will be easy, they said.

Colleges and universities have already raised tuition, limited non-essential travel and postponed facilities upgrades to cope with the cuts.

Some schools, most notably S.C. State University, have imposed furloughs on faculty and staff.

State Rep. Chip Limehouse, a Charleston Republican and chairman of the higher education subcommittee in the state House of Representatives, said the cuts are tough for colleges and universities.

"I'm a fiscal conservative and a cost-cutter," Limehouse said. "But we stopped cutting fat long ago. We're now down to the muscle and the bone."

The federal stimulus plan, signed into law by President Barack Obama with the hope of limiting state cuts and saving jobs, was supposed to prevent state lawmakers from cutting higher education.

To get about $120 million in stimulus aid, state lawmakers were initially required to restore higher education funding to 2006 levels for the fiscal years 2009 and 2010.

Last year, that would have meant adding about $64 million in state spending on higher education, according to a fact sheet compiled by the S.C. Commission on Higher Education.

But state lawmakers asked for and received a waiver from that requirement.

State lawmakers agreed instead not to cut higher education more than the state budget was cut as a whole.

The waiver means other state agencies won't bear the full burden of cuts without the budgets of colleges and universities being on the table.

But it also means state funding for higher education will continue what has been a downward trend over the past couple years.

In fiscal year 2006, South Carolina devoted $653 million to the recurring educational and general operating budgets of public colleges and universities.

Two years later, that figure reached $758 million.

But by December of last year, state funding for higher education had dropped to $589 million -- only $21 million more than was spent on colleges and universities in 1995.

Because of South Carolina's unique budgeting system, which relies on a series of rolling revenue estimates, colleges and universities are forced to guess how much money they will get from the state.

Officials at Clemson and USC said their estimates have come close to the mark.

"The 2009-2010 budget we developed anticipated additional cuts of the magnitude that appear to be taking place," said Brett Dalton, Clemson's chief financial officer. "Our plan allows us to continue to focus on providing a high quality education without furloughs, midyear cuts, class cuts and responses that are disruptive to the educational process."

Moore said USC officials, like state economists, use revenue estimates to gauge how much the state will have available to spend.

He said the university has a representative sit in on Board of Economic Advisors meetings.

The school then tries to guess how much the state will have to cut from higher education spending.

Because revenue estimates are revised several times during the course of the year, so, too, is state spending power.

"Rather than waiting, we make a projection and cut to that cumulative amount," Moore said.

This year, USC estimated that higher education spending will be cut by a combined 10 percent.

So far, state cuts are at 7 percent, including the reduction that is expected to be ordered later this year.

USC has limited technology upgrades and asked departments to pare 1.5 percent from their budgets to prepare for the expected cuts.

Moore said USC would be thrilled if the budget cutting stops now and the university finds that it has more financial flexibility than it assumed it would have this year.

But when it comes to budget cuts in a bad economy, Moore and others in higher education know that, as Berra said: "It ain't over till it's over."