A panel of state officials today approved a resolution setting a cap of $975 million on construction of a new prison in Elmore County, far above the $623 million figure in a contract signed last year and making it clear that lawmakers will need to authorize more funding if they intend to complete a plan for a second new prison.

The Alabama Corrections Institution Finance Authority, which includes Gov. Kay Ivey, State Finance Director Bill Poole, state lawmakers and others, approved a resolution making the change on the Elmore County prison.

The Legislature and Ivey agreed on a plan in October 2021 to build two 4,000-bed men’s prisons, one in Elmore County and a second in Escambia County. Preliminary work is under way on the Elmore County prison, which will be a specialized facility to provide medical and mental health care for inmates. Officials have said both prisons are expected to be finished in 2026. Some of Alabama’s older prisons will close.

Lawmakers approved a total of $1.3 billion in funding to build the two prisons when they passed the plan in 2021. In August 2022, Ivey’s office said the state had signed a contract with Caddell Construction Co., that included an “initial guaranteed maximum price” of $623 million for the Elmore County prison. Finance Director Poole acknowledged that today’s resolution means a significant increase. He said multiple factors have changed.

“The early estimates were based on a very preliminary design,” Poole said. “The design is still not 100 percent complete. We increased educational and vocational space. Inflation has had a significant impact on construction costs as is seen across all economic sectors. So, we’re trying to keep all of those costs contained to the greatest extent possible.”

Poole said efforts to make the prison comply with court orders have also been a factor in some of the increased costs. The Alabama Department of Corrections is involved in a nine-year-old lawsuit over mental health care, medical care, and accommodations for inmates with disabilities. The U.S. Department of Justice sued the state in December 2020 alleging that conditions in men’s prisons violate the Constitution because of the violence, drugs, weapons, and other problems.

Poole said the work at the Elmore prison is ongoing and the resolution approved today allows the state to continue to pay for the work as it proceeds in stages. Poole said the state should know the final contract price at some point this summer.

“This raises the ceiling of our spending level so that we can continue to pay,” Poole said. “It doesn’t mean that we’re going to spend that much right now but we need the authority to pay the bills as these packages bid out.”

The $1.3 billion funding plan the Legislature approved in 2021 included a bond issue of up to $785 million, $400 million in federal funds from the American Rescue Plan Act, and $135 million from the state General Fund. The bond issue fell short of expectations, producing about $509 million.

Poole said today the state still expects to build both prisons. “We do anticipate being able to finance both and continue both,” he said. “We’re negotiating the design contract on Escambia right now. We will have to secure additional funds based upon the current cash on hand level.”

Last month, Alabama Department of Corrections Commissioner John Hamm gave the Legislature’s prison oversight committee an update on the prison construction and showed photos from the Elmore County site. Hamm said the Elmore prison was on schedule for completion in the first quarter of 2026.

The Escambia County prison is not as far along. Hamm said last month the design work was about 40 percent complete. He said the company Goodwyn Mills Cawood was doing the design. Much of the design in Escambia is expected to mirror the Elmore prison, although the Escambia prison will not include the specialty facilities for medical and mental health care.