The latest financial crisis at S.C. State University raises the question: Does the state invest money to save a long-term asset, or is that just throwing good money after bad?
The state Budget and Control Board wisely voted 3-1 Wednesday to keep S.C. State afloat. But instead of giving the school the $13.6 million it requested, the board agreed to lend the school $6 million. That's no small difference.
Thomas Elzey, who inherited a lot of the problems when he became the school's president last June, expressed gratitude and promised to "keep the lights on at S.C. State." But that won't be easy.
Audits and investigations have routinely cited management and fiscal problems at S.C. State. One former board member is facing criminal charges related to S.C. State, and the school's former police chief pleaded guilty to related crimes. The school lost its standing to receive funding for a major federal transportation program. Its accreditation is being questioned. And its debt totals nearly $14 million.
The Budget and Control Board applied stipulations to the loan that include using outside consultants to root out mismanagement; instituting an anti-nepotism and conflict-of-interest policy for the board; and increasing state oversight of its contracts.
Those are reasonable conditions to protect state taxpayers who are providing the money. They will also help S.C. State meet the challenges ahead and demonstrate to the Legislature that it has used the loan wisely.
It is fair, however, to debate the board's decision to settle on a $6 million loan. Indeed, Budget and Control Board member Sen. Hugh Leatherman, R-Florence, cast the sole vote against the loan, saying that it is a "Band-Aid" for a school "that's bleeding to death."
He encouraged key leaders at S.C. State - our state's only public historically black college - to return with specific emergency needs for the board to consider.
But indications are that Gov. Nikki Haley, also a member of the Budget and Control Board, is satisfied with the $6 million loan to cover essential services and "get them moving again."
President Elzey did give the Budget and Control Board some encouraging information: The school has had a record number of admissions. That is promising for the university's continued viability - and to its bottom line.
As state support for public colleges and universities has been constinually reduced, it is ever more important for S.C. State to find its way to solvency.
And while the university focuses on getting its finances in order, it should also focus on ensuring that an S.C. State degree is credible. The education of its students shouldn't be diminished by years of poor financial management.
S.C. State must make sure that taxpayers are confident that they are saving a school that is valuable to its students and the state.