This is a combined state and federal update, as it involves a South Carolina Supreme Court decision that impacted the access of SCICU member institutions to federal CARES Act funding.
The court in the Adams case ruled against Governor McMaster’s proposed use of $32 million of federal CARES Act funding for the “SAFE Grants” program, which would provide financial support to K-12 students attending private schools. In essence, the court found that because the money came into the state treasury before being disbursed it became state “public” money which the South Carolina Constitution prohibits being used for direct aid to private and religious institutions.
At the same time the court ruling was issued, SCICU member institutions were in the process of applying to the S.C. Department of Administration for federal CARES Act funding to reimburse them for COVID-19 expenses, as authorized by the South Carolina General Assembly in Act 154.
Unfortunately, the South Carolina Department of Administration, which is responsible for administering these funds, informed SCICU that it was not going to process the applications from private colleges and universities because it felt the Adams Case ruling rendered the agency and its leadership liable if they did so.
The governor has filed with the Supreme Court a motion for rehearing the case, among the arguments being that the court was overly broad in its interpretation of “public” monies. An amicus brief submitted by U.S. Attorney Peter McCoy supported the governor’s motion, asserting that the CARES Act funding remained federal and did not become public because it was temporarily deposited in the state treasury before being disbursed. Thus, the constitutional prohibition does not apply.
Both sides of this case are supportive of SCICU’s position. In opposing a rehearing, the plaintiff noted their challenge was specific to the proposed SAFE Grants Program, and that their lawsuit and the ruling had nothing to do with Act 154.
Our hope is that the court will clarify its ruling such that the Department of Administration will begin processing the Act 154 funding requests from South Carolina’s private colleges and universities.
We now await a decision by the court.