Alabama lifts prison bond authorization past $1 billion

Governor's Office/Hal Yaeger

Alabama Gov. Kay Ivey signed a bill to increase the authorization for prison bonds to $1.285 billion in response to a federal lawsuit on prison conditions and increasing projected costs.

Senate Bill 60 was signed into law Monday by the Republican governor.

The Alabama Corrections Institution Finance Authority sold $509 million in Series 2022A revenue bonds in July 2022. This amount counts against the $1.285 billion.

The additional authorization, if drawn, would be used to build a 4,000-bed prison facility in Escambia County and possibly other smaller prisons.

"With Act 2025-107, the Alabama Corrections Institutions Finance Authority is now authorized to issue up to $839,985,000," said Susan Franklin Wilhelm, Alabama assistant finance director.

"This includes remaining authority from prior enactments as well as the $500,000,000 in authority conveyed by [the just passed] SB60. Please note that, at this time, there are no plans in place to issue additional debt," she said.

"The governor's signature completes the financial arm of this large, long-term construction project," said State Sen. Greg Albritton, R-Atmore, who sponsored the original bill.

The authorization for the additional bonds will be effective July 1. The bonds would be sold by the Alabama Corrections Institution Finance Authority.

The bill says after construction of the Escambia facility is completed, three existing facilities are to be closed. After 60% of construction of the facility is completed, the construction of a separate woman's facility is to be started and the state is to consider destruction or renovation of three other facilities.

In 2019 the U.S. Department of Justice raised concerns about what it said was the Alabama prison system's unconstitutional understaffing, culture, management deficiencies, corruption, policies, training, non-existent investigations, violence, illicit drugs, and sexual abuse. The prison facilities' dilapidated condition contributed to the system's problems, the department said at the time.

The DOJ filed a lawsuit in 2020 against the state for what it called unconstitutional prison conditions. The lawsuit is ongoing.

In 2021 the legislature approved a $1.3 billion prison construction plan to build two large prisons, one in Elmore County and the other in Escambia, and renovate others.

However, cost estimates for the Elmore County prison have gone up to about $1.1 billion.

Money for both projects has been expected to be $400 million from the American Rescue Plan Act, $185 million from the state's general fund and the rest from bonding.

The bill sponsors believe the higher bond authorization will help to cover the increased expected costs.

The Alabama House approved the bond authorization increase 74-16 earlier this month. Democrats supplied all the no votes, with some voicing concern about how the increased borrowing might affect the state's bond rating.

Alabama is rated Aa1 by Moody's Ratings, AA by S&P Global Ratings and AA-plus by Fitch Ratings.