Conditions On College Construction Critized

Legislators say commission has no authority

October 11, 2017 - 11:31 am

OCTOBER 11, 2017 BY MATT LONG (South Carolina Radio Network)

Prominent state legislators attacked South Carolina’s higher education commission Tuesday, saying it has no authority to put conditions on funding for new college construction projects.

Lawmakers on the Joint Bond Review Committee criticized guidelines the Commission on Higher Commission (CHE) has begun using on “ancillary” construction projects — those facilities such as sports facilities not considered core for academics. The commission last December voted to use tougher standards on such projects, including recommending that any at least 50 percent of the project be funded either up front or with private equity before they approve borrowing.

Last year, the JBRC overrode the commission after commissioners told Coastal Carolina University to raise more private funds for $31.8 million in football stadium renovations. The JBRC followed that up Tuesday by again disregarding the commission’s request that Clemson University reduce its $12.5 million borrowing request for a new tennis facility and instead use private funds to cover half the cost.

Members were irritated at the commission for putting conditions on new construction projects. “What authority does CHE have to start doing this to our higher education system?” State Sen. Hugh Leatherman, R-Florence, asked rhetorically.

Leatherman, the Senate Finance Committee chairman, questioned if legislators even gave commissioners the ability to set criteria for construction projects. In the past, the commission has generally approved whatever colleges submitted so long as they were properly funded.

But CHE Chair Tim Hofferth said it was too easy and the commission approved $3.7 billion in college construction over a decade. He said the near-bankruptcy of South Carolina State University and its subsequent state bailout in 2015 led the commissioners to more seriously vet college spending. “We wouldn’t want to be advancing projects that require more debt if the institution wasn’t in a position to be able to absorb that,” he told South Carolina Radio Network after Tuesday’s meeting.

Legislators have criticized the commission — whose members are appointed by the governor — for several years now over rising tuition and college fees which have South Carolina public universities among the highest attendance costs in the Southeast. Hofferth said he’s puzzled why lawmakers are now opposing efforts to rein in debt at those same colleges.

“It’s not a requirement. It’s not a mandate,” he said. “It’s an expectation that on projects like tennis courts, football operations centers, softball fields, we would want (schools) to put a minimum of 50 percent equity in the deal.”

Clemson’s tennis facility would not have been funded by tuition or student fees, the school says. In its submission, Clemson pledged to pay for construction solely through bonds repayed through athletics department revenue. The project will move on to the state’s top financial panel next week.

State Rep. Brian White, R-Anderson, said he thinks it better to fund construction through the same pot of money and risky to finance through private equity. He believes the commission should focus on other ways to reduce college costs. “They’re taking the easy way… and looking at walls,” he said. “Take a look at what’s inside the walls and that’s where you’ll find the problem. (CHE isn’t) doing away with programs. It’s allowing them to put in more degrees, grow that, then they have to grow the staff, then the facilities.”

Hofferth agreed there are other methods to help slow the rate of growth at colleges, but countered $3.7 billion in construction debt likely contributed to “skyrocketing” tuition.

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