Budget cuts mark Pastides’ tenure as university president
Harris Pastides had been USC’s president three weeks when the first cut came.
Another came in October. One more in December.
There were five budget cuts that year, worth $36.9 million on the Columbia campus. More than 23 percent in a year.
South Carolina’s tax revenue was falling in 2008, and politicians’ talk of austerity grew. USC’s cuts — real and rumored — formed a bleak backdrop for a budding presidency.
“Those were scary times,” Chief Financial Officer Ed Walton said. “People did not know what was coming next.”
To compensate, the university froze hiring, losing 273 employees to retirement and other jobs. It brought in extra students: about 5,000 more in five years. It raised tuition: more than 22 percent for in-state students and nearly a quarter for everyone else.
Pastides, 59, is credited with navigating the Great Recession, improving key measures of academic quality and posturing it to improve more.
But staying afloat had consequences, and the university will feel them for years, officials say.
Five years later, USC is forced into a corner. It can’t raise tuition any more, and an already-packed campus can’t handle more students.
USC is at a pivot point: It faces big-picture questions of what it wants to be — and what it can afford.
How big should it be? How can it grow more? Whom does it serve?
And mostly, what’s next?
Pastides and his colleagues aren’t shy about the luck of his timing.
“He got hit by a ton of bricks when he walked in,” said Sandra Kelly, former faculty senate chair. “He didn’t get much of a honeymoon,” said Mark Becker, USC’s provost at the time.
“Nine percent. Twelve percent. Eighteen percent. To the point where I said, ‘You are kidding me,’” Pastides said. “‘This has got to be an April Fools’ joke.’”
Pastides and his administration managed to steer USC through the recession without the layoffs, furloughs and department cuts many universities saw.
Becker, now president of Georgia State University, likened USC’s reactions to the state cuts to surgery. It had to cut, but couldn’t go too deep or lose vital functions. It couldn’t use a Band-Aid.
And it wouldn’t be the same.
More than ever, USC began to operate as a business. At the time, that meant cutting department budgets, raising tuition and focusing on profitable programs.
Today, it means looking for new ways to grow: finding private money for building projects, pushing online classes and adding academic programs that bring in more students without needing more professors.
It also means asking the state to get funding back.
USC’s requests for state money over the past few years have been targeted. Officials pitched specific projects and asked for specific amounts.
It worked, for the most part. They got state money for Palmetto College, for a summer semester and for a handful of renovation projects.
As tax revenue grows because of the state’s recovering economy, though, Pastides said he plans to make broad requests again — fewer pet projects, more pleas for a bigger budget.
That effort will likely begin today with Pastides’ State of the University address, five years after the first cut.
But much of the money USC lost during the recession is not coming back.
That much is clear from the legislators who control the state’s budget and the university trustees and administrators who are asking for a bigger slice of it.
Rep. Chip Limehouse, chairman of the House Ways and Means subcommittee that handles higher education, said that USC has gotten some funding increases and more will likely follow, but the broad funding the university wants might not.
“There’ll be a need for it,” said Limehouse, a Charleston Republican. “Whether it’ll come or not is another story.”
State funding for the Columbia campus has rebounded the last two years. After falling $82.6 million, or 49.9 percent, from its high point in 2007-08 to its bottom in 2011-12, it has gone up $14.6 million. The state now pays about a tenth — $97.6 million — of the Columbia campus’s $962.9 million budget.
Limehouse doesn’t think the state will ever pay for higher education like it did in the early 2000s, when it covered more than a third of USC’s budget. Senate Finance Chairman Hugh Leatherman, a Florence Republican, doesn’t expect a big funding boost, either.
The new reality of state funding may be beneficial for USC — to a point — some university officials said.
They have forced the university to compete especially hard to get private money and to keep tax dollars, and they sparked a wave of ambitious initiatives.
“It makes you get up and go, because you have to,” said Gene Warr, chairman of USC’s board of trustees.
Among the initiatives launched under Pastides:
—Carolina’s Promise, the biggest fundraising campaign in university history, which has raised more than three-quarters of its $1 billion goal
—Palmetto College, an online education initiative that pairs two-year campuses with an online curriculum and brought in $5 million in annual state funding
—On Your Time, a summer semester that could make better use of resources that sit idle during the summer and speed graduation times, making room for more students
But the ambition hasn’t always had successful results.
Innovista, a plan to grow campus toward the Congaree River and bring more research and investment to Columbia, struggled through the recession — even its two parking garages have lost money — and has found plenty of criticism in state politics.
Pastides, who has championed the $144 million project as president and as a vice president in charge of research and economic development, still defends it as “a great project at the wrong time.”
The plan will be buoyed by $50 million in road projects paid for by increased county sales taxes, and it has given a framework for much of USC’s ongoing building boom: It’s the site of the new Darla Moore School of Business, and it will house a privately funded apartment complex and the expansion of the Greek Village.
After years of rapid growth, USC is at a breaking point.
Today’s freshman class — the biggest in university history — won’t see the student body grow much, if at all, Pastides said, while USC completes a line of building projects.
While USC’s tuition grew at similar rates to other South Carolina schools, officials say it has reached the market’s maximum, and it can’t add more students. There isn’t enough space in classrooms, labs and dorms, and the faculty’s size is still catching up after an explosion of new students.
To pay for its ongoing construction spree, the university has taken on nearly two hundred million of dollars of debt. It now has $526.7 million to pay off, according to Walton, up 56.9 percent in five years.
Class sizes have swelled, but professors’ pay has not. Campus — in dorms, in the Russell House, in parking garages — has grown cramped.
USC’s building boom has mostly fixed up aging buildings and shuffled some schools around, but the university still has many needs for beds, labs and classrooms.
“There is still a ways to go,” said Kelly, the former faculty senate chair.
The university is now eyeing renovations that would add classroom space over the next five years, and it is spending about $20 million to add 200 to 250 new faculty through 2016.
When the School of Law moves into its new building in 2016, its old one will be retooled to add classrooms and labs, and the public health building will be renovated to house the journalism school.
Those projects will leave the Carolina Coliseum empty — a looming question and a likely target of renovation work, Walton said.
After back-to-back building projects, though, Leatherman, the Senate Finance chairman, thinks USC needs to pause.
“I think you need to just take a deep breath and to evaluate what’s happened and what your next steps are,” Leatherman said.
USC today faces a number of questions that will dictate its shape for the coming years, and it will do so as colleges statewide are in flux.
The decisions the university faces come down to two key questions: How big should it be, and whom should it serve?
The university won’t be able to grow for a few years, but when it can again, how much should it? And if it decides to slow down, how can it do so without turning South Carolina students away?
The questions mirror those that face higher education in South Carolina.
Limehouse, chairman of the House higher education budget subcommittee, said the state has more public colleges than it can afford. State officials including Gov. Nikki Haley are eyeing new ways to divvy up state money, such as rewarding graduation and job placement rates.
Discussions are also underway that could consolidate schools in Charleston.
The College of Charleston is in merger talks with the Medical University of South Carolina that could create a new research university, and a merger between the college and the private Charleston School of Law has also been proposed.
For USC’s part, Provost Michael Amiridis expects the next few years will see more focus on how Columbia works with the rest of the university system.
Amiridis said USC will try to use its satellite campuses to ease the pressure on Columbia. The university may pursue an admissions process that would send some applicants elsewhere, like USC campuses in Aiken and Spartanburg.
“We’ve got to look at ideas that help us attract students to those campuses, to help those campuses grow,” said trustee Thad Westbrook, of Lexington. “On our campus in Columbia, there are limits. There are limits on lab space, on classroom space.”
The next five years will likely also see more public-private partnerships and online certificate programs in other countries, Amiridis said. Both could help increase USC’s reach — and its revenue.
But those projects could come at their own cost: quality.
The University of Virginia, a top state university, dealt with the same conundrum last year.
Its president, Teresa Sullivan, who has an academic background like Pastides, fought with business-minded board members over online education. The clash escalated, and Sullivan was forced out, prompting an uproar on campus and national media attention before she was eventually reinstated.
USC’s trustees have had nothing but praise for Pastides’ leadership — last year, it awarded him a $125,000 raise and a $250,000 retention bonus over five years.
But USC, like Virginia, faces concerns of whether Palmetto College, designed as a cheaper way to spread higher education in South Carolina, will water down its educational quality and take away from the prestige of a USC degree.
The last five years have seen improvements to USC’s academic profile, though they haven’t been reflected in national rankings.
The student-faculty ratio dropped as the faculty began to rebuild; the Honors College won a No. 1 ranking; and graduation and retention rates rose, as did freshman GPA and SAT scores. In the meantime, USC’s U.S. News and World Report ranking slipped from No. 108 to No. 112.
Westbrook calls the university’s progress in spite of the recession “remarkable.”
Leatherman says Pastides has gained “tremendous” maturity on the job.
Limehouse thinks he’s “just starting to hit his stride.”
And Pastides says he’s become more ambitious and more intentional since he took the helm.
“How do we maintain the momentum?” Amiridis said. “That is the question.”