USC, Clemson Sitting on Fat Reserves While Seeking Millions in New State Funds

November 19, 2014

Investigative Reports

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Treasure ChestSouth Carolina’s two biggest universities are once again asking the Legislature for millions in new state funding while sitting on far-larger reserves.

The University of South Carolina’s main Columbia campus wants an additional collective $10 million for fiscal 2015-16, which starts next July 1, for its “On Your Time” graduation program and Honors College. In its budget request submitted recently to the state Executive Budget Office, the state’s flagship university said if “no or insufficient funds are available to meet this budget request,” it will be “required to finance the maintenance of educational quality through tuition price increases for students and families.”

Yet the university, which has eight campuses statewide and a total student enrollment of about 47,000, entered this fiscal year with a $336 million “unrestricted net position,” defined in its year-end financial report as “resources available to the institution for any lawful purpose of the institution.” As of June 30, USC had nearly $366 million in cash and “cash equivalents.”

Clemson University is asking for an additional collective $7 million in state funding next fiscal year for its “Focus on Student Success” graduation program, Center for Human Genetics and International Center for Automotive Research’s “Deep Orange” project. In its budget request for “Focus on Student Success,” which is aimed, like USC’s “On Your Time” program, at speeding up graduation rates, the upstate university said state investment in its project would “potentially save students and their families millions of dollars in tuition and fees.”

Yet Clemson started this fiscal year with a $114.9 million “unrestricted net position,” which is “available to the institution for any lawful purpose of the institution,” according to its Comprehensive Annual Financial Report. The university, which has a total student enrollment of more than 21,000, had nearly $177 million in cash and “cash equivalents” as of June 30.

Clemson and USC have started recent school years with $100 million-plus and $300 million-plus, respectively, in “unrestricted” reserves, according to financial records reviewed by The Nerve.

Since fiscal 2011, Clemson has raised its tuition and required fees for full-time, in-state undergraduate students by a collective13.43 percent to $13,446, while USC’s main campus has hiked tuition and fees a total of 14.02 percent during the same period to $11,158, according to state Commission on Higher Education records.

Clemson’s athletics department recently proposed an annual $350-per-student fee to pump a projected additional $6 million yearly into the school’s athletics budget, according to media reports. The proposal has not been brought to the university’s board of trustees for a vote.

The Nerve on Tuesday sent written questions to spokespersons for USC and Clemson seeking comment on why their respective universities are seeking more state funding for next fiscal year given their relatively large reserves. No responses were provided by publication of this story.

USC’s total budget for its eight campuses for this fiscal year is approximately $1.29 billion, an increase of about 5.1 percent over last fiscal year. The total budget includes state, federal and “other” funds – largely tuition and fees. “Other” funds make up the largest chunk of the university’s budget;  $773.5 million in other funds was appropriated this fiscal year for USC’s main campus, which represents 73 percent of the campus’ total $1.05 billion budget.

The other-fund portion of the Columbia campus’ budget for this fiscal year increased by $58.3 million, or more than 8 percent, according to state budget records. The university routinely carries over tens of millions in other funds annually; about $249 million, for example, was carried over into fiscal 2013, records show.

Last year, USC President Harris Pastides proposed a “Fair Funding Initiative,” promising not to seek a tuition increase in exchange for an additional $10.13 million in state funding for this fiscal year for its eight campuses. USC was appropriated nearly $2 million more in state funds for this fiscal year, state budget records show; tuition and required fees at the main campus increased by 3.16 percent.

Clemson’s total ratified budget for this fiscal year is about $825 million, an increase of 5.1 percent from 2013-14, state budget records show. Tuition and required fees for this school year increased by 3 percent for full-time, in-state undergraduate students.

Besides recurring budget items for next fiscal year, Clemson and USC also are asking the Legislature for funding for one-time, multimillion-dollar capital projects.

Clemson is seeking $25 million to renovate Sirrine Hall, which houses the College of Business and Behavioral Sciences; and $15 million for electrical maintenance and improvements at the main campus. USC has requested $25 million to renovate the existing law school building to house the university’s College of Retail, Hospitality and Sports Management; $10 million for information technology “infrastructure replacement and enhancement”; and $5 million to renovate the historic South Caroliniana Library.

In its budget request for the capital projects, USC noted that the “only alternative (funding) sources are institutional funds which may require increases in tuition or additional debt to be incurred.”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve or Facebook and Twitter @thenervesc.