COLUMBIA — Critics of a proposal to take $3.5 billion of college revenue off legislators' budget spreadsheets fear the move could lead to rising costs in a state where college expenses paid by parents and students already rank highest in the Southeast.
The S.C. Commission on Higher Education, the state's coordinating board for public colleges, approved a "student bill of rights" in May that calls on colleges to cap, freeze or decrease expenses and clearly report fees in a way that allows for cost comparisons.
"The taxpayers and families of South Carolina deserve greater accountability," Chairman Tim Hofferth told The Post and Courier. "We need more transparency to control these costs."
Instead, he said, the General Assembly's proposal to remove outside revenue from budgets weighed by lawmakers makes college spending even more opaque.
"It's like throwing gas on it," Hofferth said.
The state ranks eighth worst nationwide in average debt owed by students graduating from a public, four-year college, at $30,564. South Carolina is the only Southeastern state in the top 10.
The legislative proposal strikes from the state budget how much public colleges receive outside of state and federal tax money. Each college's "other funds" tally includes student tuition, fees, private donations, research grants, ticket sales and TV contracts for athletics — amounts that are set by college boards or can fluctuate depending on factors ranging from fundraising efforts to winning seasons.
The combined $3.5 billion that public colleges expect to collect from those sources during the fiscal year that started Sunday is not part of the $8 billion plan legislators passed last week for money coming into state coffers. The budget designates about $600 million of that to the state's 33 public universities and colleges.
House Ways and Means Chairman Brian White counters the proposal does nothing other than remove confusion over what the numbers represent and a misconception that legislators control them.
The budget provides no breakdown of what accounts for each college's "other funds."
"How many people know what’s in 'other funds' anyway? It’s really convoluted," White, R-Anderson, said. "The General Assembly gets pegged for growing the budget. No, we didn't."
On average, public colleges get less than 10 percent of their revenue from the state. Other state agencies, such as the Department of Motor Vehicles and state courts, also get much of their money from "other funds" — essentially fines and fees for them. The proposal only affects public colleges.
White points to lottery-backed scholarships as an example of why college budget lines are particularly confusing. Most lottery revenue is essentially counted twice in the budget, first by the line that designates profits to scholarships, then, when students use their award at whatever school they choose, that tuition payment becomes part of their college's "other funds."
The University of South Carolina's main campus in Columbia expects to collect $816 million from "other funds" in the upcoming school year, followed by Clemson University at $801 million.
Spokesmen for both colleges applauded the move as providing a more accurate picture of how much tax money the schools receive. Neither university requested the off-budget move, they said.
"Other funds, which comprise the vast majority of university resources, are paid by choice to the university by students and their families, corporations, donors, ticket holders and others in exchange for education, housing, research, tickets, merchandise, etc.," said USC spokesman Wes Hickman, calling the move "more transparency, not less."
He accused the commission of conflating two unrelated topics — the proposal and student fees — to mislead South Carolinians.
Both spokesmen said their schools' dedication to transparency includes posting budget breakdowns, fees and spending online.
When legislators approve those "other funds" in the budget, they're technically authorizing that spending. Colleges can't spend more than their tally. But legislators have rarely, possibly never, used that line to control college spending.
Still, critics fear removing that accountability step will let college boards loose to increase costs.
"It does not do away with the budget process. They still have to justify what they’re doing. They still have to answer questions," White said. "They still have to report it. The only thing we’re doing is saying we don’t have to give you the authorization."
Hofferth hopes Gov. Henry McMaster vetoes the proposal, which is written into the state budget, when the governor issues his line-item vetoes later this week.
"It's something we're taking a close look at," said his spokesman, Brian Symmes. "Gov. McMaster has always advocated for transparency and accountability in budgeting."