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Senate passes $1.25 billion bond issue for schools

By TODD STACY, Alabama Daily News

MONTGOMERY, Ala. – The Alabama State Senate on Monday passed legislation to authorize an $1.25 billion bond issue to fund school construction and other capital improvement projects.

Senate Bill 242 passed 29-0 in the Senate and now goes to the House of Representatives for consideration. First proposed by Gov. Kay Ivey in her State of the State address, the bond issue would help K-12 schools and state colleges pay for capital improvements, from construction projects to technology upgrades.

Originally set at $1 billion, Sen. Del Marsh, R-Anniston, amended the bill to add another $250,000 to the bond issue.

“This money will go a long way to making much needed upgrades and improvements to facilities such as classrooms, libraries, dorm rooms and vocational training facilities,” Marsh said.

Sen. Arthur Orr, R-Decatur, who is sponsoring the bill, said it was a good idea before the coronavirus hit, but an even better idea now that the outbreak has impacted budgets and economies.

“I hope it doesn’t come to this, but we could be looking at a rebound of the virus in the fall and looking at a situation where the economy is challenged again. This money would be spread around the state helping schools and colleges with their capital needs, but also helping our economies that have faced a lot of headwinds due to the virus and its impact,” Orr said from the Senate floor.

Sen. Bobby Singleton, R-Greensboro, who leads the Democrats as Senate Minority Leader, questioned the distribution formula, particularly as it concerns counting college students that are taking classes online instead of on campus.

“I don’t disagree with the bond issue,” Singleton said. “I’m just not in agreement on the formula in terms of how it would split, okay? At some point in time I think we have to start looking at where is the need with some of these universities.”

Orr said the funding distribution was based on existing formulas and that colleges that use online classes still have to pay for the infrastructure to provide the instruction. As amended, the bill would allocate about $912 million to K-12 schools, $218 million to state colleges and universities, and $120 million to community colleges.

The last bond issue for school construction was passed 12 years ago under then-Gov. Bob Riley. Part of the current bond proposal would retire about $67 million from the last bond issue and replace it with money borrowed at a lower interest rate, Orr said.

“The time is very opportune,” Orr said.

Repayment on the $1 billion loan would be about $80 million a year for 20 years, state Finance Director Kelly Butler estimated in March. That was before the Senate added another $250,000 to the proposal.

Sen. Larry Stutts, R-Tuscumbia, said he supported the bill because bond rates are at historic lows, so this is an ideal time to enter the market.

“Hopefully the bonds will be sold in the next few months and the funds will be available by this fall,” Stutts said. “This not only provides needed funds for capital improvements in the schools but will also be an economic stimulus in communities across the state.”

Sen. Tim Melson, R-Florence, did not vote Monday, according to the vote record, but said he’s not opposed to the bond issue.

“It’s kinda scary voting for something that big without having more discussion and information on it,” Melson said. “I hope for more information later.”

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