Current as of April 14, 2010
Dear Campus Community:
The S.C. Board of Economic Advisers met earlier this afternoon, and lowered revenue projections again – this time by almost $60 million for the current year and the same amount for next year -- as a result of an accounting error in Columbia.
The Board reported that an account had not been set up for the state Department of Revenue to deposit tax collections from cracking down on scofflaw businesses. Because that didn't happen, the forecasting board inaccurately calculated state revenue projections, and moved today to revise those estimates. As of this writing, state officials are exploring whether the impact on this year’s already deep revenue shortfall can be met temporarily with state reserves, then the reserves be repaid through an appropriation made in next year’s budget that will take effect on July 1. The cumulative impact could be an additional $118 million in reductions statewide. We will keep you advised regarding the longer term implications but expect no effect at Winthrop this fiscal year.
However, even before the error was discovered, Senate Finance Chairman Hugh Leatherman had been indicating that the version of next year’s budget that his chamber will recommend later this month will appropriate less funds overall than the House version – exactly the opposite of the usual pattern in South Carolina. That suggests a final conference committee budget agreement – usually completed by early June -- that will reduce Winthrop’s operating budget even more than the $3.3 million proposed in the House. While federal stimulus dollars will be included in the state’s budget for the year ahead, we already know those dollars will disappear on July 1, 2011 – meaning another $3.3 million loss to Winthrop then, unless state lawmakers find or create new state revenues to replace those dollars.
Meanwhile, I am continuing to meet with executive officers regarding the budget challenges we will be facing over the next couple of years, and how we will approach those systematically and with due diligence.
As you may have read in some regional and national media over the past couple of weeks, our society in general is now entering a time when the public sector budget “buffer” initially provided by stimulus funds is now dissipating, just as overall state revenue collections are reflecting the effects of the economic crisis of the past couple of years. That is putting more pressure on public sector budgeting than ever before, as we’ve seen already in our region’s local governments and school districts.
To date in the 2009-2010 fiscal year, Winthrop has been able to use very careful budgeting of operating revenues to meet these circumstances, while also positioning Winthrop to transition to a more enrollment-based funding model. In other words, growing enrollment carefully over time will allow us to move to a financial model less reliant on state appropriations, given what we are seeing all across the country: State governments from coast to coast are providing ever-fewer operating dollars to public higher education, so they can meet funding demands from K-12, Medicaid and corrections.
The trustees and I spent some of our time talking about this changing financial model during their annual on-campus retreat in February. We also spent considerable time talking about society’s changing expectations from higher education in current times as well – ranging from the impact of technology on how our students learn, to the generation of non-traditional learners who need our assistance in boosting educational attainment for transitioning careers.
While all of us came away from that retreat recognizing the challenges facing us on all those fronts, there also was a sense that within these challenges, there is opportunity for institutions willing to scan this new environment, self-assess in that context, and brainstorm about adapting to new realities in a values-based way. The trustees felt Winthrop is well-suited to such a thoughtful approach, given both our usual annual Vision of Distinction process, as well as our history of defining collaboratively the nature and character of the overall Winthrop community.
The trustees will be gathering for a regular meeting on campus later this week, and I expect these conversations that were begun in our retreat will continue at that time, with an eye toward how Winthrop will continue to meet our current challenge: Enabling the future of the University, while managing the demands of the present.
I will keep you posted on those discussions. Meanwhile, best wishes as we enter the timeframe of concluding another academic year at Winthrop by appreciating all this community of learners continues to achieve, even amidst current challenges.