Last year, the Legislature passed a $1.3 billion plan to build two men’s prisons, $400 million of which will come from the American Rescue Plan Act, while the rest will come from the state’s General Fund and bond sales.
Although the Alabama Corrections Institution Finance Authority was $200 million short in its bond sale this year, state officials say they are moving forward to build new prisons.
Friday, Alabama Finance Director Bill Poole said on Alabama Public Television’s “Capitol Journal” there are enough funds to construct the prisons.
“We are very comfortable with our current position in terms of moving forward with the two prison projects,” Poole said. “And, I want to state very clearly, the state’s going to move forward on both of those. We have sufficient project funds to move forward for at least two to three years.”
Poole said eventually they will need to find more funding to complete the prisons, but said that isn’t an immediate concern.
“We will need to secure some addition financing,” he said. “We’re dialing that number in. It’s hard to get cost estimates pinned down, so those are some moving targets at the moment as some of the designs are finalized and estimates and contractors line up. So, we will need some additional financing.”
The finance chief blames current market conditions for the recent shortfall in bond sales.
“It’s a difficult market right now,” he said. “Look at the markets, whether it’s the stock market. There’s a lot of challenges out there, rates are moving around, and so in the case of the longer term debt that we needed to secure in order for the financing, those struggles, that’s difficult in the market right now, and that’s by and large why we came up a little short on that initial financing effort, but I’m confident we’ll be able to close that financing gap.”
Poole said he’s not too worried about being able to find more financing in the future and reiterated that there’s enough money to get started on the projects.
“[W]e’re not in a rush,” he said. “We’re not in a panic. There’s no reason to be concerned at this point. We have ample, we have over a $1 billion of project funds at present, so we’re in a very good position to take our time and make sure we handle the financing, the pricing, to keep these projects on time and under budget and financed fully.
“Those are the three objectives and we’re determined to accomplish all three.”