Why USC’s Budget Proviso Is Unconstitutional

SOUTH CAROLINA’S FLAGSHIP UNIVERSITY GOES AROUND THE LAW

Recently the South Carolina Commission on Higher Education found itself the subject of debate in newspapers and on the Senate floor. A quick background:

In many other states, some board or agency – usually a board of regents – has power to govern the state’s system of public colleges and universities. If an institution wants to start a medical school, say, or to purchase land or a building, the board must approve it beforehand. The reason is to ensure that the state’s higher education institutions are serving the state as a whole and not merely competing against each other for prestige. South Carolina has no such board, but it does have the Commission on Higher Education, which, though nothing like as powerful as a board of regents, does have authority to block institutions from some large-scale endeavors on the grounds that these endeavors are not in the interest of the state as a whole.

Which is what the commission, or CHE, recently did. The commission refused to approve the University of South Carolina’s request to purchase a 14-acre parcel in downtown Columbia for over $9 million. The reason: USC’s granting of around $515 million in tuition breaks to out-of-state students. “This,” one commissioner reasoned, “is lost revenue to USC.”

The university responded by having state lawmakers slip a one-year proviso into the state budget suspending parts of the CHE’s oversight authority. With that proviso in place, USC could purchase the land. This is a common way state universities get around the CHE’s authority in order to fund highly questionable constructions or land purchases: see, for instance, the way in which Coastal Carolina used legislative leaders to circumvent the agency in order expand its football stadium with bond-financed funds.

Editorialists and analysts have soundly criticized the universities and legislative leaders for this and similar moves. What’s received less attention is this latest move’s legality.

The constitutionality problem

Currently state-funded universities must submit their project proposals to the CHE.

The budget conference committee’s proviso 11.23, however – adopted 19 to 23 by the Senate, unanimously by the House – would eliminate the CHE’s role from the approval process for the upcoming fiscal year. Instead, institutions of higher education would submit their project proposals to the Joint Bond Review Committee through the Department of Administration’s Executive Budget Office.

The move, in addition to being underhanded, is unconstitutional. The South Carolina Supreme Court has ruled on multiple occasions that lawmakers can’t amend state law in the budget except as it “reasonably and inherently relate[s] to the raising and spending of tax monies.” This is based on Article III, Section 17 of the state constitution, which states that that all acts and resolutions must “relate to but one subject” which must be expressed in the title. The subject of the state budget is government funding for the upcoming budget year; it has nothing to do with the authority of a governing agency (the CHE) to approve projects by the agencies under its purview (in this case, USC).

As the Supreme Court stated in a 2016 decision overruling a budget proviso changing how the DOT secretary was appointed:

While a provision in the appropriations act need not directly relate to spending revenue … it must “reasonably and inherently” relate to this purpose. [emphasis in original]

The ruling goes on to state:

Moreover, if [lawmakers] were correct, then the appropriations act could include any item, however tangentially related to an agency’s operations, so long as that item were included in that agency’s budget section. Such a rule would effectively exempt the appropriations act from the ambit of art. III, § 17. The language of the constitution and our precedents, however, require that the general appropriations act, like every other “Act or resolution having the force of law” relate only to “one subject.” S.C. Const. art. III, § 17.  

A proviso that simply removes authority from a state agency in order to allow another state agency to purchase land  does not meet this requirement.

Time and again, the legislature has passed laws containing non-germane provisions. As long ago as 2004, the legislature passed the Life Sciences Act, a bill that originally dealt with no fewer than 15 topics, only to have the Court strike it as unconstitutional after Upstate activist Ned Sloan brought a lawsuit against it. Similar decisions have been rendered by the Court since then.

Sadly, it seems to take a lawsuit to get the legislature to mind the constitution.

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