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Senate cuts funding for S.C. World Trade Center
By Scott Miller
Staff Writer
State lawmakers may pull the plug on the financially distraught S.C. World Trade Center, a nonprofit long dependent on state tax dollars to stay afloat.
The trade center is not necessarily dying on the vine, however; as the organization’s leaders look to cut costs, which could affect services and boost revenue, they will ultimately reduce the center’s dependence on state funding, said Paul Roderique, a member of the trade center’s board of directors.
The WTC identifies import and export opportunities for South Carolina businesses and educates high school students on career possibilities in international trade.
“I don’t want to give the impression that the center is able to work without the state funding,” he said, “but I don’t want to give the impressions that we will shut down either.”
Onetime cut
The nonprofit organization may need to survive only one year without state assistance.
The state began giving the trade center $297,688 annually in 2005, of which $197,688 went to aiding the development of the World Trade Park and Education Research Center and $100,000 for discretionary use in support of the center’s mission.
In 2006, state dollars accounted for more than 58% of the trade center’s total income, according to federal tax filings. In 2007, the organization began the year $21,000 in the red, as it struggled to raise funds and curb rising expenses.
Every year, the organization faced losing state assistance, with Gov. Mark Sanford trying to veto the funding.
“We just don’t think the state should be in the business of supporting one nonprofit over another,” said Sanford spokesman Joel Sawyer, saying the governor had no problem with the trade center’s mission or programs. “If the state is going to fund an activity it should be based on merit, not based on who has the most political clout.”
That political clout ultimately overruled each of Sanford’s WTC vetoes, behind strong support from Senate President Pro Tem Glenn McConnell, R-Charleston, Sen. Chip Campsen, R-Isle of Palms, and Sen. Robert Ford, D-Charleston.
This year, however, the Senate decided to cut funding for the trade center and WT-PERC from a budget that already received approval from the House of
Representatives.
McConnell and Ford did not return calls to the Charleston Regional Business Journal, but Campsen said the trade center has not lost the state’s support.
Rather, this year’s budget cut stems from a fiscal belt tightening that every state agency and many other organizations are feeling. The S.C. Board of Economic Advisors lowered state revenue projections by $90 million for the upcoming fiscal year, or about 1.3%, forcing the Senate to find more cuts in an already trimmed state budget. The popular Spoleto Festival
USA, for example, faces a $246,000 budget cut this year.
“The Senate was left in the predicament of slashing and burning when it comes to the budget,” Campsen said. “I believe the ratcheting down of the revenue projections is not over yet, and there could be midyear budget cuts as well.”
Cutting funding from the trade center “shouldn’t be viewed as any kind of erosion of support,” Campsen said. “It’s just a fiscal reality.”
Planning for the worst
Meanwhile, the trade center must react quickly to the loss of state funding without the help of a full-time leader on staff. Former Executive Director Belinda Davis was asked to step down after the board determined she hadn’t met specific performance goals.
Now, the trade center must find its fourth leader in less than a year, a tough task for an agency with little money facing further cuts.
Roderique and Chair-elect Jackie Adamson said the agency is considering ways to replace Davis but could not be specific at this time.
“There is a plan and we are moving along (on) that plan. We hope to be in a position to elaborate on what that plan is in the next few weeks,” Roderique said. “We’re just not prepared to announce something until we have an agreement with the parties involved.”
The two board members also couldn’t be specific about how they intend to cut costs and raise revenue, though Adamson said WTC supporters have stepped forward with in-kind donations to help both financially and with expertise. But no donations are committed, and fundraising has been one of the trade center’s core problems in past years.
Roderique also said WTC events like the recent golf tournament have become more profitable than they were previously.
Still, the state funding is critical. Even with event profits and in-kind donations, the organization will be better equipped to handle a reduction in state money than a full cut, Roderique said.
“We’re continuing to look at and try to find ways to work with other organizations and find less expensive ways to continue the mission, but the state money has made it possible for us to help the number of businesses we help each year and to educate the number of high schoolers we educate each year.”
Cost cuts likely would target payroll, Roderique said, though nothing is set in stone. Adamson previously said the organization had overextended itself under past leadership and that some employees may have been overpaid based on their productivity.
State benefit
Ultimately, however, the services the trade center provides could be limited.
This year, the trade center facilitated informational meetings with ambassadors from Chile and Vietnam. The center also organized several trade missions.
“We’re the only organization to my knowledge that helps businesses find low-cost international suppliers of products that ultimately make them more competitive,” Roderique said. “Sometimes you have to go outside the United States to find those products. We can do that. If South Carolina wants South Carolina businesses to be successful and to grow, then you want to support those efforts to help them import as well as export. It’s importing and exporting both that make you successful and truly make you competitive globally.”
Adamson said, “Other state agencies are promoting international trade through exporting.
Their mission is not to assist importers. That’s not what their mission is. That’s not what their expertise is.”
In addition, the trade center offers globalMarkets, an Internet-based education program that’s part of several high school curricula across the state.
“These are things I think the state directly benefits from,” Roderique said. “We don’t want to lose that. We don’t want to even lose a portion of that by losing state funding.”
Scott Miller is a staff writer for the Business Journal. E-mail him at smiller@scbiznews.com.
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