Last year, the Alabama Legislature approved a $1.3 billion prison plan that included two new mega-prisons to be built on sites in Escambia and Elmore Counties.
Under the plan, the state will use $400 million in American Rescue Plan Act (ARPA) funding granted to the state from the federal government for COVID relief, $135 million in surplus General Fund revenue and borrow $725 million through the bond process.
However, according to a Bloomberg News report on Monday, there are not enough buyers to raise the $725 million.
According to the story from Bloomberg's Amanda Albright and Danielle Moran, underwriters were "short around $200 million of orders on the bond deal."
Inflation and Justice Department scrutiny were blamed for the difficulties.
"Tepid demand for the bonds is the latest in a series of obstacles for this sale," Albright and Moran wrote. "Earlier on Tuesday, the issuer said it was facing litigation from incarcerated people who say the state should use funds to improve conditions in its existing penitentiaries before it pays interest on debt."
Alabama had its hand forced on the prison issue by the Justice Department after several years of delayed action blamed on political turmoil and the pandemic.
Justice Department officials from both the Trump and Biden administrations threatened the state for its inaction as conditions deteriorated inside Alabama Department of Corrections facilities.
In 2021, a go-it-alone lease-plan approach from Gov. Kay Ivey fell apart as private contractors that agreed to lease new prisons to the state could not secure financing amid Black Lives Matter protests.
The current plan has also been subject to protests from activists, who gathered outside Birmingham's Regions Center on Monday.
To connect with the author of this story, or to comment, email jeff.poor@1819News.com.
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