A year ago, State Senator James “Jabo” Waggoner (R-Vestavia Hills) and his bipartisan allies in the Jefferson County Legislative Delegation began a determined effort to find emergency financing that would allow Birmingham Southern College (BSC) to stay open. Now it appears those efforts have likely failed.
“I’m hearing from a lot of people,” Sen. Waggoner—one of BSC’s most prominent alums—told the Associated Press. “Some are crying. Some are angry,” said Waggoner. “Of course, I’m very disappointed too, and I don’t understand it.”
Waggoner thought his efforts had been successful. He and his fellow Jefferson County legislators originally asked the Legislature to appropriate $30 million in American Rescue Plan Act (ARPA) dollars to the 167-year-old institution of higher learning.
Fellow legislators balked at gifting a one-time appropriation to the college, even though the state was flush with cash from federal COVID dollars and record budget surpluses.
RELATED: BSC fate hangs in balance after Boozer denies loan request
Waggoner responded to those concerns by introducing the Distressed Institutions of Higher Education Revolving Loan Fund Act. That legislation would allow the State Treasurer to make a $30 million loan to distressed institutions of higher education. The Legislature agreed and passed the bill. Waggoner believed he had saved the school. BSC would get the money it needed and time to launch a two-year capital campaign to raise $100 million for the school’s endowment. The state would eventually get their money back with interest when the school was able to pay it back.
“I can say unequivocally that this enabling legislation was conceived, written, and designed to make it possible for Birmingham-Southern College to obtain a bridge loan that will allow it to operate while the College rebuilds its endowment,” Sen. Waggoner wrote in a column.
All those dreams came crashing down on Senator Waggoner and the rest of the BSC family.
On October 18, the College received a letter from State Treasurer Young Boozer (R) stating he had denied their loan application. Boozer had been given the power to loan BSC the money, but in his judgment, the failing college was not a good credit risk.
RELATED: Hearing set for Birmingham-Southern suit against Treasurer Boozer
“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. “The Act was passed unanimously by the Alabama Senate, by a bipartisan supermajority in the House, and was signed by Gov. Kay Ivey on June 16.”
BSC filed a suit to force Boozer to loan them the money, citing legislative intent and other factors.
Alabama Attorney General Steve Marshall’s (R) office filed a motion with the court to dismiss the BSC lawsuit. Montgomery Circuit Court Judge James Anderson granted the AG’s request and dismissed the lawsuit, agreeing with the state that the legislation gave Boozer the discretion to deny the loan.
BSC is considering appealing to the Supreme Court. Meanwhile, rumors are rampant that the college could close as soon as Christmas.
RELATED: State treasurer seeks AG opinion on loans for ‘distressed’ colleges
“Since receiving word that our lawsuit against the State Treasurer was dismissed on Wednesday afternoon, we have been working nonstop to explore every option for the future of this College,” BSC President Daniel Coleman said in a statement on Friday. “While we cannot disclose the details of those options, we share your sense of urgency, and we remain focused on finding a solution.”
State Rep. Neil Rafferty (D-Birmingham) carried the bill in the Alabama House of Representatives.
“I don’t think this fight’s over, no,” Rep. Rafferty told CBS Channel 42 in Birmingham. “The legislature may need to return to the power of the pen and the authority we’re given by the people to ensure a more positive outcome by rewriting a piece of legislation.”
BSC’s 781 current students and 284 employees are left wondering about their futures.
“Please be assured that however this situation plays out, we will do everything we can to ensure that our students, faculty, and staff are taken care of,” President Coleman wrote. “We are lining up resources that we hope we never need, including direct coordination with other institutions to ease the transfer process. We are continuing to make our case both publicly and privately to people and organizations who can help.”
To connect with the author of this story or to comment, email [email protected]
Don’t miss out! Subscribe today to have Alabama’s leading headlines delivered to your inbox.