The Alabama Senate Education Budget Committee approved a new piece of legislation on Wednesday that, if passed, could help to extend a $30 million loan to Birmingham-Southern College, allowing the financially-embattled institution to remain open and operational.
The bill, filed by State Sen. Jabo Waggoner, removes the State Treasurer, Young Boozer, from the process of administering the loan, instead placing the control with Dr. Jim Purcell, executive director of the Alabama Commission on Higher Education.
Waggoner (R-Vestavia Hills), the most powerful advocate of BSC in the Alabama Legislature, offered insight into his renewed effort now in 2024.
“As all of you remember last year, we passed the bill and designated the state treasurer as the one to administer the $30 million loan program for Birmingham-Southern,” said Waggoner. “But he (Boozer) refused and now we’ve had another bill to designate the administrator of the Commission on Higher Education as the one to administer this loan program. Basically the bill is the same except who’s going to administer the program.”
RELATED: Young Boozer: If Birmingham-Southern College closes, it’s on them – not the State Treasurer
BSC President, Daniel Coleman, sent out a statement earlier this week regarding the passage of the legislation through the committee.
“Our plan for financial stability focuses on our endowment campaign,” he said yesterday. “The loan we seek from the state will provide us time to complete that campaign.”
State Sen. Arthur Orr (R-Decatur), speaking from his vantage as chairman of the committee, is concerned about the precedent the bill could set.
“What institution out there that might be in financial straits will be next and would in my opinion need to be treated similarly and if this bill passes we’re going to have trouble distinguishing from future colleges that may come in a financial distress situation,” Orr said.
“The new bill to me brings a lot more to the table that gives me pause. I voted for the last bill and thought we had done a good job to cast a lifeline to the institution. It’s unfortunate that it didn’t work out.”
Under Waggoner’s bill, to receive a loan a college must:
- Have been operating for more than 50 years in Alabama
- Have a significant impact on the community in which it is located
- Be experiencing financial hardship that could lead to closure of the institution
- Adopt a resolution authorizing the application for a loan from this program to maintain operations as it replenishes its endowment through private gifts.
- Have assets sufficient to pledge as collateral
Update: As of Thursday afternoon, proponents of the legislation have been working to address concerns brought forth by Sen. Orr in committee yesterday and are optimistic a compromise is on the horizon.
Austen Shipley is a staff writer for Yellowhammer News.
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