By MARY SELL and TODD STACY, Alabama Daily News
MONTGOMERY, Ala. – As the state’s plan to lease new mega-prisons hit another apparent roadblock Monday, more lawmakers appear ready for the state to instead borrow money to construct its own new facilities.
Bloomberg News reported Monday that Stifel Financial Corp. is no longer involved in the financing of prisons that would be owned by Tennessee-based CoreCivic. It’s the third underwriter to walk away from the proposal.
Gov. Kay Ivey in February signed lease agreements with prison company CoreCivic for men’s facilities in Elmore and Escambia counties. Her office Monday evening referred questions about the future of the deal to the Alabama Department of Corrections.
Some legislative leaders on Monday said lawmakers are ready to approve a state-owned prison plan. At least one said support would be there as early as next Monday, the Legislature’s final day of the regular session.
Multiple sources told Alabama Daily News that lawmakers have discussed taking current legislation that is awaiting final passage and substituting it with language initiating a state prison bond process similar to one former Gov. Robert Bentley pursued in 2016 and 2017.
Sen. Arthur Orr, R-Decatur, said there are at least two bills still pending in the Legislature that could be amended for a prison bond bill. While that would be “highly unusual,” he said lawmakers have “gone through the numbers and discussed it ad nauseam.”
“I think members are ready to advance it,” Orr said Monday afternoon after learning about Stifle. “There is not a whole lot of discussion that I think would bring any new issues to light. We know we have to move forward and build some new facilities.”
Rep. Steve Clouse said he’s heard some “scuttlebutt” about a possible bill swap next Monday. If that’s the case, supporters need to get something out to members in the next few days so they can study it,” he said.
“That would take a lot of work in the next couple of days,” Clouse, R-Ozark, said.
Others say a special session would be better timing in terms of not interfering with Ivey’s efforts.
“The thing that we don’t want to do is to do something, and then mess up her plan, and then the courts become involved and then they take care of it at two to three times the cost,” said Sen. Clyde Chambliss, R-Prattville. “So we’re trying to be very careful and if our plan is viable and going to work, then we’ll just continue on that course.
“I’ll continue to work with the governor’s office and look to her leadership on how we should proceed,”
The CoreCivic leases Ivey signed Feb. 1 have a financial close date of June 1, meaning the company technically still has three weeks to come up with financing.
In January, Alabama Daily News reported that lawmakers learned the projected total lease payments for three large prisons, the third to be built and owned by BL Harbert in Bibb County, were expected to be $94 million the first year and increasing each year thereafter. The total cost over 30 years for the three prisons is estimated at slightly more than $3 billion. Ivey had previously said $88 million was the annual ceiling on the leases.
Orr said proposals discussed would include three prisons and cost “less than $1 billion.” The lease proposals have a price tag near $3 billion over 30 years.
“It’s in the best interest of the taxpayers,” Orr said of the state borrowing the money.
Orr and others said lawmakers have signaled to Ivey they are ready to move forward with a state-owned prison plan.
“We have to do the construction, the question is, what exactly does that look like,” Sen. Greg Albritton, R-Range said Monday evening.
“I think the bond issue certainly is where we need to go” Rep. Steve Clouse said Monday.
Clouse said a special session on a bond issue is probably the best route.
The governor’s office has previously said a bond issue is problematic because it sets the state back years in realizing new facilities and comes with extra costs, such as maintenance.
“We have been in discussions with legislators about the issue of prisons for years and continue to be engaged with legislators and legislative leadership on the many, complex issues regarding our facilities,” Ivey spokeswoman Gina Maiola said. “The governor continues to pursue solutions to this decades-old problem, and she remains focused on ensuring these facilities are built.”
Previous efforts for state-built prisons crashed and burned multiple times before Ivey opted for the contract route in 2019.
Meanwhile, lawmakers on Monday got some guidance on how to spend its billions in American Rescue Plan money. Both Clouse and Albritton said planning that spending will likely require a special session.
“I expect June is going to be a very busy month,” Albritton said.
Ivey’s prison lease plan came after multiple failed attempts by the Legislature to come to agreement on state-funded new prisons. Former Gov. Robert Bentley tried during several sessions to get a bond bill through the Legislature.
Albritton said a bond proposal has been floating around since last fall and discussed openly among legislators and given to the governor’s office.
“It’s been there,” Albritton said. “Yes, there is some discussion and has been throughout the session about bringing that up at some point. But the governor has asked that we not do anything to undermine or undercut or subvert her efforts. And the legislature has been cognizant and I think cooperative in that way.”
“… (The governor) has some tough decisions to make, some tough data to review,” Albritton said.