Birmingham-Southern College (BSC) might've received a planned $30 million state loan if the city of Birmingham and Jefferson County governments had "stepped up" to guarantee or fund some of the loan, according to State Sen. Arthur Orr (R-Decatur).

Birmingham-Southern is on the brink of a possible shutdown due to financial missteps by the college's administration in previous years and declining enrollment. Alabama State Treasurer Young Boozer recently denied a $30 million state loan to the private school.

Legislators passed the Distressed Institutions of Higher Education Revolving Loan Program and appropriated $30 million in the 2023 legislative session. The Alabama State Treasurer's Office administers the program.

On Wednesday, Montgomery County Circuit Judge James Anderson dismissed a lawsuit filed by Birmingham-Southern last week against Boozer for the loan denial.

Orr said on Friday's broadcast of Huntsville radio WVNN's "The Dale Jackson Show" that, "I think the state is done with the proposal that was put on the table now that the Judge has spoken." 

"Birmingham, which has a very large budget, the city and the county of Jefferson, both of those entities have the most to lose if Birmingham-Southern goes down the tubes. They've got of course the jobs and the economic impact but also the reputation to their area of the state. All of us lose in some sense but those two really need to step up. They could've guaranteed the state loans to Young Boozer. They were supposedly going to write some $5 million checks. I don't know that that's true or not or rather they would've done that. They really should've stepped up. If they step up, then I think it's a new game and the state and Young Boozer might feel a little more comfortable making that loan," Orr said.

Orr continued, "When I talked to (BSC) President Daniel Coleman about it, he was a bit ambivalent about the messaging he was receiving from those two entities. I don't want to get in between those two parties, the school and the local politicians, but they have the most to lose. They have the fiscal capacity to do it at these levels and they ought to step up and I think that changes the equation completely."

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