State says it can use relief funds to build new prisons

MONTGOMERY, Ala. — Alabama officials say federal rules do not appear to block the state’s plan to use $400 million in pandemic relief funds to build prisons, although the U.S. Treasury Department document states that new prisons are generally not an eligible use of the money.

The U.S. Department of the Treasury on Thursday issued the final rule for the State and Local Fiscal Recovery Funds program, enacted as a part of the American Rescue Plan. The Treasury Department wrote that construction of new correctional facilities is “generally ineligible” if they are built as a response to an increase in rate of crime.

Alabama is steering $400 million of the more than $2 billion it will receive from the American Rescue Plan to build new prisons. State officials said Friday that the new rules do not prohibit the expenditure, while opponents of the plan say the rules back up that it is an inappropriate use of the money.

JaTaune Bosby, executive director of the ACLU of Alabama said in a statement that prison construction is an inappropriate, “particularly while healthcare workers, teachers, small business owners, and so many other people in Alabama are struggling during this ongoing pandemic.”

“But it’s not too late for Governor Ivey and the Legislature to do the right thing and stop this irrational plan, which is not effective in addressing the real crisis facing Alabama prisons and those incarcerated. They have all the power to change course, reallocate these funds towards what Alabamians really need, and avoid having the federal government get involved — again,” Bosby said in a statement.

The Alabama Department of Finance said in a statement that the prison construction plan “is not impacted by the US Department of the Treasury’s Final Rule.”

Kirk Fulford, deputy director of the Legislative Services’ Agency fiscal division, wrote in an email, that the $400 million is coming from a segment of American Rescue Funds intended to make up for “lost revenue” during the pandemic that states can use to shore up government services. He said states have greater flexibility over that money.

“I do not see the final rule impacting our use of the $400 million for prisons at all. The funds appropriated for prisons came from the ‘lost revenue’ portion of the funds,” Fulford wrote in an email.

He noted that the rules say funding may be used to pay for government services in an amount equal to the revenue loss experienced by the recipient due to the COVID-19 public health emergency.