In 2022, Birmingham-Southern College officials announced that the school was nearly $38 million in debt and in imminent danger of shutting down.
Since then, BSC Board Chairman Rev. Keith D. Thompson announced the school would remain open – contingent on bridge funding from state and local government.
That funding was expected to be secured after the Alabama Legislature authorized the Distressed Institutions of Higher Education Revolving Loan Program, which was discussed by lawmakers as tailor-made for BSC’s financial and institutional standpoint.
The bill, backed by State Sen. Jabo Waggoner from Vestavia Hills, was signed into law by Gov. Kay Ivey in June.
Last week, State Treasurer Young Boozer denied Birmingham-Southern’s loan request, stating the college did not meet the requirements for receiving a loan under the program.
This decision spurred BSC to file suit against Boozer for his denial of the bridge loan, calling the move, “sudden and unwarranted.”
BSC President Daniel Coleman said the college had engaged in good faith discussions with Boozer for several months.
“Unfortunately, our good faith has been betrayed,” he said. “After several additional attempts over the last two weeks and up through today to get Treasurer Boozer to execute the will of the Alabama Legislature, we have no other choice but to seek remedy from the court.”
BSC asserts the college does in fact meet the requirements for this loan. Coleman says that the refusal from the State Treasurer’s office is a refusal to carry out the law as written by state legislators.
BSC has operated for more than 50 years and contributes a significant economic impact on its community, generating $70.5 million in Jefferson County and $97.2 million statewide.
Another key requirement to receiving this loan is having collateral to repay the state. BSC has sufficient assets to pledge as collateral, officials say.
“It is an undisputed fact that Birmingham-Southern College has met each and every requirement of the law,” said Coleman. “Boozer’s refusal to uphold a state law that was passed with bipartisan support in the Alabama Legislature and was signed into law by the governor brings significant cost to the state.”
Waggoner said Boozer should uphold the law.
“I am deeply disappointed by the failure of State Treasurer Young Boozer III to execute the Distressed Institutions of Higher Learning Revolving Loan Fund Act, which I co-sponsored with my colleague Sen. Rodger Smitherman,” Waggoner wrote in an opinion column. “The act passed unanimously by the Alabama Senate, passed by a bipartisan supermajority in the House, and was signed by Gov. Kay Ivey on June 16,”
Waggoner said the collateral offered by BSC for the loan exceeds “several times over” the amount of the proposed loan, arguing that keeping their doors open is a matter of economic development.
“When one considers the economics of the situation, there is simply no way the State can fail to benefit from the approval of this loan. I call upon Treasurer Boozer to approve it without further delay so that BSC can continue its storied 167-year history of improving our state’s economy and preparing Alabamians for lives of meaning and purpose.
“There is absolutely no compelling reason, either from a financial or policy standpoint, why a loan should not be extended. I hope and trust the situation can be resolved in a manner that protects this immensely valuable educational and economic asset.”
Grayson Everett is the state and political editor for Yellowhammer News. You can follow him on Twitter @Grayson270