Late Thursday afternoon, a motion was made for South Carolina to follow the provision in the Affordable Healthcare Act (Obamacare) and expand Medicaid coverage. The motions was tabled along party lines. I’ve been contacted by constituents asking me to vote in favor of the expansion so the full Senate can debate it. There is no bill that expands Medicaid, the amendment was on the appropriations bill (the budget).

When the appropriations bill is debated by they full Senate (approximately 2 weeks), the amendment may be offered again for a full up or down vote by the Senate.

With all the news about college graduates having student loan debt problems, it appear that some colleges are running into financial difficulty, and even closing their doors. Jim Kappler recently sent the following information to Anderson County legislators that summarizes the financial sustainability of 1700 colleges and universities in the United States, including 32 in South Carolina. Jim also prepared a graph and table that show the financial trend of the SC colleges mentioned in the report.

Anderson County Legislators,

The information presented below about colleges having financial trouble, including several in South Carolina, brings up the following questions that you will likely have consider as legislators, if the trends presented come to pass:

* Colleges have closed in other states from financial difficulty. What is the likelihood of any South Carolina college or university having its finances deteriorate to the point where it will have to close?

* What is the likelihood of a South Carolina college asking for a “bailout” from the General Assembly?

* Is any South Carolina college or university “too big to fail”, and would the General Assembly “bail out” that college, or let its doors close?

* What would be the impact on the SC higher education system and taxpayers of having the entire student enrollment of a failed college transferring to other SC colleges? How would other SC colleges accommodate this?

* If a college closed, how would this impact the local area businesses that rely on that college for employee training and education?

Why some small colleges are in big trouble
http://www.bostonglobe.com/magazine/2013/04/13/are-small-private-colleges-trouble/ndlYSWVGFAUjYVVWkqnjfK/story.html
(Excerpt)
In an analysis of the financial records of 1,700 US colleges and universities, the Boston-based consulting firm Bain & Company estimated that one-third of them were on an unsustainable financial path, with operating costs increasing faster than endowment returns and other revenues could cover them. This is  a problem the colleges can no longer solve, as they once did, by simply increasing tuition.

Analysis of the financial records of 1,700 US colleges and universities
http://www.bain.com/Images/BAIN_BRIEF_The_financially_sustainable_university.pdf
(Excerpt- List of trouble signs for a college or university at financial risk)
You might be at risk if….
1. You are not a top-ranked institution
• Your admissions yield has fallen and it’s costing you more to attract students
• Median salaries for your graduates have been fl at over a number of years
• Your endowment is in the millions not billions, and a large percentage is restricted

2. Your financial statements don’t look as good as they used to
• Your debt expense has been increasing far more rapidly than your instruction expense
• Your property, plant and equipment (PP&E) asset is increasing faster than your revenue
• You have seen a decline in net tuition revenue
• Tuition represents an increasingly greater percentage of your revenue
• Your bond rating has gone down
• You are having trouble accessing the same level of government funding

3. You have had to take drastic measures
• You are consistently hiking tuition to the top end of the range
• You have had to lower admissions standards
• You have had to cut back on financial aid
• You have reduced your faculty head count

Interactive point and click matrix showing financial trends of colleges and universities
(Additional images showing SC colleges below)
http://www.thesustainableuniversity.com/
(Excerpt)
This matrix is a trend analysis, displaying the direction of the higher education industry’s macroeconomic health.

The matrix displays the trend of each institution’s financial sustainability, using views of the institution’s balance sheet (equity ratio) and income statement (expense ratio) to indicate whether an institution’s financial position is getting stronger or weaker. The financial sustainability of institutions in the upper right (red) sections is deteriorating. The sustainability of institutions in the lower left (green) sections is improving.

The matrix does not represent an institution’s absolute financial position because it does not measure its starting point nor ending point. Instead, it shows, over a five-year period, whether these institutions were moving toward a more sustainable financial future or toward a less sustainable one.

The color coded image below shows the above table with 32 South Carolina colleges ranked as:
Green: These colleges and universities are financially sound according to the latest available data (41%)

Yellow: These colleges and universities are at risk of slipping into an unsustainable financial condition (25%)

Red: These colleges and universities have been on an unsustainable financial path in recent years (34%)

http://paycheckeconomics.files.wordpress.com/2013/04/sc-college-financial-trend-table.jpg
http://paycheckeconomics.files.wordpress.com/2013/04/sc-college-financial-trend-table.pdf

The graph shown below is a plot of each college’s Asset Ratio change vs. Expense Ratio change over the last few years. Areas on the graph are color coded Green (Sound or Improving), Yellow (at risk of deteriorating), and Red (not sustainable) as above to indicate how the colleges finances are trending.

http://paycheckeconomics.files.wordpress.com/2013/04/sc-college-financial-trend-graph.jpg
http://paycheckeconomics.files.wordpress.com/2013/04/sc-college-financial-trend-graph.pdf

Thank you for your time and consideration.

Our friends over at the South Carolina Policy Council have begun a “project conflict”. They’ve asked legislators to voluntarily disclose all sources of income over $1,000 as it is their view that it should be law. Currently, the only source of income I have that meets this criteria is already current law. Because of state contracts (Medicaid, State Health Plan), I have to disclose that I am president of Bryant Pharmacy & Supply and I disclose the amounts of these contracts. You can look this up here.

Here’s what they are asking:

Report any paid, private-source positions held by you and your spouse (please list name in parentheses and identify as spouse); and generating at least $1,000 in income from Jan. 1, 2012, to the present date. Freshman legislators: Please report paid, private-source positions held by you and your spouse from Nov. 6, 2012, to the present date. Positions include, but are not limited to, those of an officer, director, trustee, general partner, proprietor, representative, employee or consultant of any corporation, firm, partnership or other business enterprise; or any paid positions with private nonprofit organizations or private educational institutions. Lawyer-legislators: Please list the primary areas of legal practice for your law firm under the heading titled, “Type of Organization.” Do not report any paid positions with state or local government entities for you or your spouse.

Report the source and type of earned (salary, wages, contracts, consulting fees, etc.) and investment income (dividends, capital gains, rent, etc.; for stocks, please list names of companies; for rental property, please describe type of property and give address) of at least $1,000 for you and your spouse (please list name in parentheses and identify as spouse) from Jan. 1, 2012, to the present date. Freshman legislators: Please report sources of earned and investment income of at least $1,000 for you and your spouse from Nov. 6, 2012, to the present date. No dollar amount of earned or investment income needs to be specified for you or your spouse. Do not report income from any state or local government entity in South Carolina for you or your spouse.

When do we stop and where do we draw the line? I have mixed feelings about some of this discussion, but as always I’m all ears. The South Carolina Legislature is a part time position. Most members of the General Assembly have other jobs. I think its a good thing. It is healthy to leave the intoxicating atmosphere in Columbia every week and spend a couple of days working in the real world. If and when we strengthen these requirements, it probably won’t affect me personally, however, I struggle with the notion of mandatory disclosure for business associations that are not remotely affected by South Carolina Statute. One of my colleagues noted that this information could be used by a competitor unfairly. Also, should non-conflicting interests of our spouses be public? Feel free to post your thoughts.

(by Kelsey Farnham) Senator Bryant has been the legislative sponsor for TeenPact 2013 in South Carolina. TeenPact is an organization with a mission to train youth to understand the political process, value their liberty, defend the Christian faith, and engage in culture at a time in their lives when, typically, they do not care about such things.

Each year, a group of students ages 13-18, come to Columbia for a four day camp where students meet important officials, interview lobbyists, analyze legislation, discuss current events, pray for their leaders, improve their public speaking skills, write their own bills, and conduct their own TeenPact legislature. Classes are fast-paced, hands-on, and create dynamic experiences where a vision is casted for citizenship and students are coaxed out of their comfort zones.

Senator Bryant Introduced this year’s group of TeenPact students as a group of South Carolina’s brightest upcoming leaders from the Senate floor on Tuesday. He also spoke at their end of week graduation. After the students acted out their mock legislation with their own personal written bills, Senator Bryant gave some real life experiences and examples of bills going through the Senate this week. He talked about causes that he’s been advocating for throughout his term and spoke on the challenges of living out a genuine ‘salt of the world’ life in the Senate. He congratulated the students on finishing the leadership school, encouraged them to get involved with a political party, cause, or campaign, and motivated them as they left with a quote on persistence by 30th president Calvin Coolidge.

h.3560 is legislation that adds persons deemed mentally ill to the list of individuals not allowed to own or purchase a gun. We would probably all agree that an armed severe mental illness patient would be a threat to public safety. However, the bill is inartfully drawn. It contains this language:

Adjudicated as a mental defective’ means a determination by a court, board, commission, or other lawful authority that a person, as a result of marked subnormal intelligence, or mental illness, incompetency, condition, or disease

A court, board, commission, or other lawful authority is a huge loophole. So far, our efforts to only allow a court to adjudicate have been defeated. I’m still skeptical of h.3560, however, limiting the adjudications to only courts, would help most of my heartburn.