By CINDI ROSS SCOPPE
Associate Editor

NOT EVERYONE was crazy about my recent comment that it made sense for colleges to take the biggest budget cuts because “those deep cuts add up to only 2 percent to 5 percent of their overall budgets.”

One person even asked for a correction. As much as I sympathized with her argument, though, I couldn’t find a clear error.

But my conversations reminded me of how many people are not fully aware of a significant and disturbing change in state spending, and of what a terribly misleading picture people can get of the size of state government from standard budget documents.

Let’s start with the dramatic change: the steady reduction of taxpayer support for our colleges.

Unlike our neighbor to the north, which has always made higher education a priority and has given state colleges enough money to keep tuitions reasonable, South Carolina has never put a lot of money into the colleges and universities that it owns.

Our state gives its public colleges only half as much money per student as Georgia gives its colleges — and only a third as much as North Carolina. When one of colleges’ two main funding sources is low, that means the other one — tuition — will be high, or else they have to scrimp so much that quality plummets.

Legislators say they provide significant support to colleges, through the HOPE, LIFE and Palmetto Fellows scholarships. Those scholarships do help students who do well enough in high school to earn them — and well enough in college to keep them. But they don’t increase the amount of money colleges receive; they merely change the name on the tuition check. They do nothing to keep tuition low.

Worse, they make it much tougher for those who don’t earn or keep scholarships to afford college. Now, don’t get me wrong: I think states should provide financial rewards (i.e., academic scholarships) to their smartest students. But it is in the interest of everyone who wants to continue living in this state for the rest of the students who can do college work to go to college — and graduate without a mountain of debt. There are far more of those students, so how good a place South Carolina is for all of us to live will be determined largely by whether or not they get good jobs, pay their taxes and become contributing members of our society.

My earlier column noted that while colleges’ “general funds” were cut by 15 percent, the cuts to what budget documents call “total funds” were significantly less. Winthrop’s Rebecca Masters argues that the “total funds” numbers are inflated by money that doesn’t actually belong to the colleges: Some the Legislature gives to the colleges with orders that it be distributed to legislators’ pet projects; some federal student grant money is deposited in the colleges’ accounts but must be given to the students once their bills to the colleges are paid. That second category accounts for a full 10 percent of Winthrop’s “total funds.”

If I were putting the numbers together, I wouldn’t include either in the total; but I think their inclusion can be justified. (“Total funds” also includes a larger pot of money schools are obligated to spend in specific ways — on buildings, on an endowment, on scholarships; this money I would include in a total I compiled.)

But whether you include or exclude any of that money, the most significant thing the numbers point to is the public divestment in public colleges. The latest round of cuts means that USC gets just 18 percent of its funds from state government. Clemson gets just 16 percent, Winthrop 15 percent.

Those numbers make it easy to understand why a lot of state colleges like to refer to themselves as “state-assisted” colleges.

Now, let’s talk briefly about all the “total funds” numbers in the budget. The colleges offer a dramatic cautionary note about taking these numbers at face value, because colleges receive so little money from the state; but practically every agency has some “total funds” money that it either does not control or that it must, by law, use in specific ways. Those limits mean that “total funds” numbers paint a misleading picture of how easily an entity can absorb cuts — and could lead to some decisions lawmakers wouldn’t otherwise make. But a much larger problem is that they paint a misleading picture of how big our government is.

The problem is this: When one governmental entity transfers money to another, the money gets counted twice in the state’s “total funds.” The tens of millions of dollars of scholarship money that are included in the Commission on Higher Education’s budget also are included in the “total funds” received by the colleges that admit scholarship recipients. The rent money state agencies pay to the Budget and Control Board (yes, state agencies pay “rent” to each other) gets counted in the individual agencies’ budgets and then again in the Budget and Control Board’s budget.

It gets even more complicated if you try to count up total spending by state and local government: All the money the state sends to cities and counties as “aid to subdivisions” gets counted in the state budget and again in the budgets of cities and counties; money for public schools (half the budget) gets counted as Education Department revenue, and then as revenue in each school district. And on and on.

All of this makes it very easy for those who are so inclined to produce alarming statistics that have little or nothing to do with reality. And that’s a trap that legislators and ordinary citizens alike can fall into — and frequently do.

Ms. Scoppe can be reached at cscoppe@thestate.com or at (803) 771-8571.

© 2008 TheState.com and wire service sources. All Rights Reserved. http://www.thestate.com