House speaker says loan possible for Birmingham-Southern
Alabama House Speaker Nathaniel Ledbetter, who earlier had expressed doubts about a $30 million state bailout for Birmingham-Southern College, today said there was discussion of a possible loan to the struggling college.
Another state lawmaker who represents the district that includes Birmingham-Southern said there are preliminary talks about setting up a loan program that would also be open to other colleges.
Birmingham-Southern announced today that its Board of Trustees voted unanimously Wednesday evening to keep the private liberal arts college open for the fall of 2023 while the school works to get back on solid financial footing. Previously, the college had said the $30 million request for state funds was a key factor in whether it could continue to operate.
“I think things have changed some,” Ledbetter said when asked about the request today. “It’s not just been a request for straight money. I think there is some question about a loan. Like anybody, if you get a loan, you’d like to have collateral. And so I think that’s being looked at.”
Ledbetter said he had been in discussions with House education budget committee chairman Danny Garrett, R-Trussville, about the Birmingham-Southern request.
“I talked to Chairman Garrett yesterday,” Ledbetter said. “I think just giving them money probably isn’t as feasible as a loan. I think that may be on the table. Certainly, we’d love to see them stay open. But we’ve got to do it the right way.”
In a statement this morning about the decision to stay open, Birmingham-Southern Board Chair Rev. Keith D. Thompson mentioned that the private college is working with state and local government for support.
“The Board of Trustees has made the informed and thoughtful decision to keep Birmingham-Southern open,” Thompson said in a news release. “We have been working closely with our allies in state and local government to secure bridge funding.”
AL.com first reported in December that Birmingham-Southern was in danger of closing this year without the public support because of financial problems that go back more than a decade. The college is also seeking $5 million from the city of Birmingham and $2.5 million from the Jefferson County Commission, a total of $37.5 million in public funds.
Rep. Juandalynn Givan, D-Birmingham, who has Birmingham-Southern in her legislative district, said she met today with House budget chairman Garrett. Givan said the proposal to help Birmingham-Southern is a work in progress with many details to decide. But she said the idea is to set up a program to allow Birmingham-Southern to apply for a loan. She said the program would also be open to other colleges.
“We don’t know what all the language will entail and all of the departments that will be involved,” Givan said. “But we are working on crafting the language. We have not set a loan amount yet. Interest will apply. There will be parameters that will be set in that will allow for transparency and accountability to the taxpayers here in the state of Alabama. And that’s basically where we are.”
Givan did not indicate how long the college would have to repay the loan or other particulars. She said setting up the program will require legislation, meaning it all depends on winning the support of a majority of lawmakers.
“If we do something, we’re hoping we do something that will open an avenue for other funding sources or entities to also assist in the bailout,” Givan said. “But this will just be a way for the state to do their part.”
Givan said the fact that federal tax dollars from pandemic relief bills like the American Rescue Plan Act have gone to private entities helps makes the case for using tax dollars to keep Birmingham-Southern stay afloat.
“We’re not in the business of trying to provide bailouts for educational institutions,” Givan said. “But with the way the ARPA funds and some of the additional surplus dollars have been handled, it makes it hard to sell the argument that you cannot give public dollars for private purposes.”
Givan said if Birmingham-Southern closed it would mean not only the loss of an outstanding institution but also jeopardize the future of the Bush Hills community of Birmingham, where the college is the anchor. She mentioned the negative impact on neighborhoods of other closures, like Carraway Hospital.
“When you start to lose the investments of those areas, you begin to pick up crime, you begin to pick up blight,” Givan said. “And it’s devastating.”
“Birmingham-Southern has long since been one of the top liberal arts colleges in the country,” Givan said. “Not just in the Southeast but in the country. Alabama cannot afford to lose not another educational institution, especially an institution of higher learning.”
In February, Ledbetter said Birmingham-Southern President Daniel Coleman had come to him with the funding request. But at that time Ledbetter expressed doubt about using state dollars to help a private college. Other legislators took the same position at that time.
Today, Ledbetter said it is not a certainty that the Legislature will find a way to support the private college but said there are efforts to make it happen.
“That conversation is far from over, I will say that,” Ledbetter said. “And in the next few days we’ll continue the conversation. And we’ll see what we can work out.”
“It’s headed in a different direction,” Ledbetter said. “We’ll see where it goes. It may work out and it may not. But I do think that’s still open.”
Asked if the campus would be the collateral for a loan, Ledbetter said, “That would be determined. They’ve got a tremendous facility down there. And we’ll just see. That’s not out of the realm, I don’t think.”