Alabama plans to spend more federal COVID relief funds in prisons than hospitals. Will the Treasury stop them?


Alabama needs all the COVID relief it can get. Before COVID, Alabama’s poverty rate was about 50% above the national average, and nearly 12% of residents under the age of 65 do not have health insurance. While Alabama has been spared some of COVID’s most devastating economic effects, in large part thanks to increased state taxes on online products, the state has historically been one of the hardest affected by the pandemic. With thousands of higher-paying jobs gone for good and many still reeling from a COVID spike just weeks ago, Alabama is in desperate need of federal help.

American Rescue Plan Act funds are coming in, but the main destination is not the hospitals that need more staff and supplies. And it’s not the schools that have seen record epidemics across the state. Instead, Alabama plans to use taxpayer dollars to build jail cells.

“Alabama state officials are set to spend five times more COVID relief money on building prisons than on helping hospitals and nursing homes,” said LaTonya A. Tate, Founder and CEO of the Alabama Justice Initiative. “Imagine spending $ 400 million of our ARP funds in larger prisons and only $ 80 million in hospitals in a state where we recently ran out of intensive care beds recently. This is obscene and it shouldn’t be. not be allowed. Our communities need the relief that ARPA was in fact designed to provide, not bigger prisons. “

A trio of bills, introduced by Rep. Steve Clouse R-Ozark and passed by Alabama House, aim to push forward a $ 1.3 billion plan to build a new prison. Nearly $ 800 million would come from a new bond measure, and $ 400 million (or 22%) of the state’s COVID relief funds would be diverted to help subsidize the project.

Is Alabama benefiting from it?

In early 2021, Congress passed the American Rescue Plan Act which allocated $ 350 billion to state, local and tribal governments for COVID assistance. It has been vital support in keeping the U.S. economy moving, and has infused cash-strapped coffers with the funds needed to help immunize and treat people during this crisis. It has been vital support in restarting the US economy by injecting cash-strapped jurisdictions with the funds needed to help get people vaccinated and receive care in this crisis.

Public and community health organizations (especially those in Alabama) have advocated for the money to go to housing, health care, education and transportation. So, the idea that he could also go to prisons was quite shocking to local advocates.

This leads to major questions for the nation: What is the appropriate use of our tax dollars, especially in the wake of an ongoing national crisis? Whose job is to determine the appropriate use of relief dollars, especially when so many people seem eager to bend the rules?

Alabama isn’t alone in looking to use federal COVID relief dollars to fund more jail facilities. In Champaign County, Illinois, the county council is trying to divert $ 20 million – half of the county’s relief allowance – to expand existing prisons. Oklahoma County Jail Trust lobbied COVID relief to build new incarceration facilities instead of investing in community health care.

These are just a few examples, with Alabama having the highest price tag and therefore capable of setting the most precedents. Governor Ivey’s plan to move $ 400 million federal dollars to prisons still only covers a fraction of the planned construction, and is still five times the $ 80 million in relief potentially allocated to hospitals.

Treasury time to act

As Alabama moves forward, the issue now falls on the Treasury, which the Alabamians have asked to stop what they see as a blatant embezzlement of taxpayer funds. The Alabama Department of Corrections has asked the Treasury to clarify the rules on how the funds can be used. The request points out that while this emergency funding is to be used by 2024, Alabama’s new prisons will not be completed until 2025 or later and therefore do not meet established criteria.

States publicly report on their COVID relief funds under ARPA, and typically focus on the kind of human needs that can be expected, such as basic income, food, and shelter. Maryland has injected $ 140 million in temporary assistance to needy families. Minnesota has invested more than $ 14 million in shelters for the homeless, while Delaware has invested $ 15 million in affordable housing. From that perspective, Alabama feels like a real outlier.

A group of over fifty investors and NGOs representing hundreds of thousands of people and over $ 10 billion in assets (including Candide Group, the impact investing firm I run) sent a letter to the Treasury noting, “Using relief funds to build prisons violates the spirit of the American Rescue Plan Act, which Congress passed to alleviate suffering – not to make it worse.” The Treasury Department’s final rule governing COVID relief funds should explicitly state that construction of any prison facility is prohibited and constitutes embezzlement. “

The Treasury responded to a request for comment:

“On May 10, 2021, the Treasury issued an interim final rule and began the process of making payments to eligible state, local, territorial and tribal governments.

The public comment period for the interim final rule continued until July 16. The Treasury has received nearly 1,000 unique comments and is carefully considering the comments received, including requests for clarification on eligible uses of budget adjustment funds, and expects its review of the comments to continue in the fall. .

The Treasury does not pre-approve specific uses of these funds.

The Treasury continues to monitor all proposed spending and expects any state or local government that uses state and local funds in violation of qualifying uses to return the embezzled funds to the federal government. “

This means that whether or not the Treasury allows the use of COVID funds for prisons will determine whether Alabama, and potentially other states, will ultimately receive hundreds of millions of dollars in grants, or debt that needs to be. reimbursed.

Alabama’s troubled prisons and their alternatives

The Alabama prison system is also currently under investigation for abuse of power and cruel conditions. The justice ministry lawsuit alleges unconstitutional treatment of detainees. Governor Ivey and the Alabama GOP say this bailout will solve the problem, but the Justice Department has already said it will not solve the problems in 2019.

“While new facilities may solve some of these physical facility issues, it is important to note that the new facilities alone will not resolve the factors contributing to the overall unconstitutional condition of ADOC prisons,” the report said.

Other voices, both in Alabama and nationally, have pointed out that the best way to deal with overcrowded and unsanitary facilities would be to rebuild hospitals, mental health facilities and addiction treatment centers, and generally investing in drug addiction education and training to shut down the prison pipeline. What if the focus was on reducing the need for prisons, rather than building more prisons?

Recently, prisons have struggled to find funding, as market sentiment has also turned against prison societies, with particular impact on Alabama. Earlier this year, Barclays and Keybanc pulled out of an $ 840 million bond deal in Alabama that was designed to build three new prisons. Now Alabama Republicans are apparently looking to the federal government in a final attempt to try to move forward with the same jail plan that the market has already flatly rejected.

“It seems there is no end to the suffering of ordinary people in Alabama,” said Pastor Kenneth Glasgow, a longtime, formerly incarcerated lawyer who founded the Ordinary People Society in Dothan, Alabama. . “Alabama has been hit harder by COVID than almost any other state in the nation, and yet our elected officials would rather put our people in cages than throw us a lifeline. This misuse of ARPA funds has nothing to do with COVID relief, and it will leave little money for the real relief our communities need. ”

Thanks to Starkey Baker for their contributions to this piece. Full disclosures related to my work available here. This article does not constitute investment, tax or legal advice, and the author is not responsible for any actions taken based on the information provided here.

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