$152M meant for SC college scholarships wasn’t spent. How will budget writers use the cash now?
State budget writers will apparently have about $152 million more than expected when they put together a state spending plan for the next fiscal. year. The source: unspent millions from a lottery scholarship program run by the Commission on Higher Education.
The amount was disclosed earlier this week in an Office of the Inspector General report, which said the commission had accumulated unused lottery profits over six years.
However, every student who qualified for a scholarship received one, said Rusty Monhollon, the executive director of Commission on Higher Education.
He added the commission has adjusted the formula it uses to predict how much scholarship money it will need.
South Carolina needs to do “all we can to educate the young people in our state, and $152 million would go a long way to doing a lot for that,” Gov. Henry McMaster told reporters earlier this week.
State law says lottery money must be used for educational purposes such as scholarships, tuition grants, educational technology upgrades at libraries, homework centers, grants to teachers pursuing advanced education or even school buses.
“If it’s lottery money, then it ought to be used for the lottery scholarships, McMaster said.
The governor added the state could use scholarships to encourage people to become nurses or teachers, which are fields that have shortages.
Monhollon told The State the CHE intends to return the unused dollars to the General Assembly. Monhollon suggested using the money to help students with some college credits complete a degree or to create a loan forgiveness program for those going into a health care related field.
Building an overall spending plan next year may be a challenge for budget writers who have to grapple with hundreds of millions of dollars more of requests than available cash.
State agencies requested about $2.9 billion in capital and other one-time costs. Before the CHE report was released, state economists projected only $896 million in one-time dollars would be available.
One-time dollars refers to revenue that will only be available for one year, such as unspent surpluses that came above state economists estimates. Recurring money refers to sales or income taxes, which can grow from year to year as long as the economy grows.
State agencies made about $1.4 billion in new “recurring” requests, usually money spent on programming and salaries. Only $673 million in new annual money is expected to be available, and the amount could be spent on teacher pay raises, state employee pay raises, Medicaid spending and state employee health insurance.
Among those recurring requests is about $128 million from colleges and universities to pay for tuition mitigation, increased scholarships and increase cost of operation.
Tuition mitigation,included in the state budget for five consecutive years, is meant to keep tuition rates for in-state students frozen and help make the cost of higher education affordable.
But using the $152 million to help freeze tuition rates may not be an ideal solution.
“You wouldn’t want to do that on a one-time dollar thing,” aid House Ways and Means Chairman Bruce Bannister, R-Greenville, whose committee will get the first bite at writing a state budget next year. He added if lawmakers paid for tuition mitigation with one-time money, continuing the expense the next year requires doubling the amount of money spent.
“I’m surprised we have that much unspent funds, so we’ll spend some time figuring out where we could allocate that the best,” Bannister added.
