Gov. Kay Ivey and a state finance board pledged on Tuesday to borrow up to $40 million to help financially struggling Jackson Hospital in Montgomery.
The funds will be issued when the hospital emerges from bankruptcy, Ivey said in a statement Tuesday afternoon.
“… Losing a hospital in one of our large metropolitan areas would be devastating not just for the Montgomery community, but for the many residents in the surrounding counties it serves,” the governor said. “For safety and security in our Capital City, it is important we maintain Jackson Hospital as a close-by option for state government, elected leaders in the executive, legislative and judicial branches, as well as the many visitors, from our fourth graders to our tourists. And even more than that, it serves so many other Alabamians nearby, in both urban and rural areas.”
The Amendment 666 Bonding Commission approved the bond. The commission was created through a constitutional amendment 26 years ago to help finance economic development and community projects around the state. It is made up of the governor, state finance director, state revenue commissioner and the Legislature’s two General Fund budget committee chairs.
The general obligation bonds will support capital expenses at the hospital, according to a statement from the Alabama Department of Finance.
“The bonds will be issued only after Jackson Hospital emerges from bankruptcy and will be contingent upon execution of a future project agreement with the state,” the statement said. “General obligation bonds issued by the Amendment 666 Bond Commission may be paid from revenues available to the state, including the General Fund revenues and the Capital Improvement Trust Fund.
“The commission’s action underscores its commitment to strengthening critical health care infrastructure and reflects a strong partnership with the City of Montgomery and the Montgomery County Commission in answering this call.”
Both lawmakers on the commission, Sen. Greg Albritton, R-Range, and Rep. Rex Reynolds, told Alabama Daily News they voted against giving the hospital $40 million.
“I simply had concerns due to other hospital requests we have had and could not fund in the past, and those that will come in the future,” Reynolds told ADN. “I do realize the impact it would have on the Montgomery area hospitals if it closed. Just a business decision on my part.”
Albritton had similar concerns about selective spending on one hospital.
“Not to mention, (in recent years) we’ve put hundreds of millions of dollars into hospitals, and now they’re more broke than they were before,” Albritton said.
The hospital filed for bankruptcy in February of this year and continues to operate through a $25 million debtor-in-possession loan from Jackson Investment Group, the parent company of Georgia-based Jackson Healthcare. Unrelated to the Montgomery hospital, Jackson Healthcare provides health care workforce services.
Ivey’s statement said the hospital was previously mismanaged.
“There is new hospital leadership in place now, which I have confidence in, and I challenged local elected leaders to come forward with their own funding commitments,” Ivey said.
A message to the hospital seeking comment about the state’s pledge was not returned Tuesday.