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Budget Update

Current as of December 15, 2009

Dear Campus Community:

The S.C. Budget and Control Board met earlier today, and voted for an across the board cut to all agencies’ appropriations of  5 percent -- substantially more than the amount recommended by the Board of Economic Advisers last month.  At Winthrop, this larger-than-anticipated reduction will equal about $855,935.

Overall, this means Winthrop cumulatively has lost almost one-third of its state support during the past 14 months.

State Rep. Dan Cooper, who chairs the House Ways and Means Committee, was quoted in media before the meeting as favoring a cut of at least 4 percent:   “We still have a Corrections Department deficit to deal with and money that has to be repaid from last year," he said.  (The state's prison system reportedly is running a deficit of about $9 million this year, and, despite a billion in budget cuts in the last fiscal year,  the state still has an overall $98 million shortfall from the last fiscal year that has to be repaid.)

The State Board of Economic Advisers in November had estimated state revenue collections were running more than 2 percent behind estimates, and eventually recommended a spending reduction of 2.61 percent to the Budget and Control Board.  The chair of the economic advisers’ group, John Rainey, has expressed long-term concerns about capacity of South Carolina’s economy to recover on pace with some other parts of the nation, given the depth of unemployment in the state and the expectation for slow jobs recovery.  The most recent statewide unemployment rate was reported to be back above 12 percent, with some counties reporting rates of over 21 percent.

As shared with you last month, Winthrop’s very conservative spending plan for the fiscal year allowed us to absorb a 4.04 percent ($721,000) summer reduction in state support, which took the bulk of our cushion for this fiscal year.  The remainder of that cushion will be absorbed by today’s action, and Winthrop will be using other administrative efficiencies, such as our energy management capacities, to make up the rest.

Today’s budget decision reminds all of us of the very tenuous nature of state support, especially in the current economy. We will continue to monitor state revenues on a month-to-month basis through the Board of Economic Advisers, but please know the two state reductions to date have absorbed the cushion we built into our spending plan for the entire fiscal year.  Today’s reduction means that Winthrop now receives less than 12.6 percent of its revenues from the state -- a far cry from the 41 percent of revenues provided by the state when today’s freshmen were born.

That is why Winthrop’s approach to these challenges must be one emphasizing both our usual creativity and increased self-reliance.  This will be our continuing challenge as 2010 dawns. Both the trustees and I appreciate all that you are doing, individually and collectively, to help Winthrop adjust to these fast-changing circumstances, and we join you in hoping for a brighter 2010.


Tony DiGiorgio















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