Budget Update

Current as of March 11, 2010

Dear Colleagues,

The S.C. Board of Economic Advisers at its meeting today left state revenue estimates unchanged for the current year, and therefore will recommend no changes in current state appropriation levels at this time.

Revenue receipts were down slightly, but officials say the dip was “just bouncing along the bottom,” so no action was warranted.

Meanwhile, the House will take up its Ways and Means Committee’s recommendations next week. As I reported a couple of weeks ago, higher education is targeted for a further 20 percent reduction in state dollars for the fiscal year beginning July 1, and that reduction will be taken from a base operating budget that reflects all other cuts taken to date since the economic crisis of Fall 2008.  That means that even after the addition of our share of non-recurring federal stimulus dollars next year, Winthrop still will have to operate with $3.4 million less than it did this year.  In two years, when federal stimulus dollars expire, the operating base would decline by another $3.4 million unless the state receives or creates new revenues to bridge the gap.

A number of state agencies are taking even deeper cuts than higher education, as the General Assembly hopes to repay a 2008-2009 deficit it is still carrying on its books, while also putting more funds in reserves, without reversing course on tax reductions approved in 2006. 

As you likely know from our colleagues in other states, South Carolina is not alone in its fiscal predicament, but the impact is deeper here because the state, compared to Southern neighbors,  was underfunding its institutions -- particularly comprehensive institutions like Winthrop -- even before the 2008 recession. These latest reductions, if approved, will take South Carolina’s state support for its institutions to a level lower than it was a quarter of a century ago.  Yet the number of students served by institutions is up over 85 percent -- and we are expected to increase the number of students completing degrees as part of our public service.

In many ways, the current situation echoes that of Fall 2008, when Winthrop had to pull together, find ways to cope and manage the economic free-fall. We adopted a statement of purpose at that time: To enable the growth and development of Winthrop for the future, while coping with the circumstances of the present.  That will continue to be our purpose as the legislative process shapes the budget realities for next year.

We will know more after the House of Representatives  debates and passes a budget bill next week.  In the meantime we will continue to monitor and analyze the economic issues while also focusing on the profoundly challenging set of circumstances dictated by the dislocations from Owens Hall and adjacent buildings. We will continue to update you on both fronts as events warrant.  My deepest thanks for all you continue to do for Winthrop University.

Sincerely,

Tony DiGiorgio