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Could leasing be the answer to new state prisons?

Bill Britt

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Some lawmakers expressed alarm when Department of Corrections Commissioner Jeff Dunn revealed at a recent Contract Review meeting that the state was looking to spend $1 billion to build three new mega-prisons.

Less than two years ago, the Legislature rejected a plan by then-Gov. Robert Bentley to spend approximately $850 million on four mega-prisons. Now it seems the prospects of securing funding for a smaller project with a higher price tag is being met with skepticism if not outright revolt.

But there is another way Gov. Kay Ivey’s administration can acquire new prisons without legislative approval.

State governments increasingly are turning to private companies for new prison facilities through a build and lease agreement.

Kansas is moving forward with plans to have CoreCivic Inc., the nation’s largest private prison corporation, to built its new correctional facility and then lease it back to the state. CoreCivic announced it has similar projects in California and Oklahoma and is pursuing partnerships in other states.

Under the lease agreement, CoreCivic would not operate the facility but would merely act as landlord.

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CoreCivic and its rival, GEO Group Inc., are seeing windfall profits under new tax rules enacted by President Donald J. Trump’s administration.

According to a report in Finance & Commerce, “CoreCivic and GEO, the biggest U.S. prison companies, are classified as real estate investment trusts. That means almost all their profits from property-related operations are tax-free as long as they’re distributed to shareholders through dividends.”

Finance & Commerce also found, “The tax rules incentivize CoreCivic and GEO to build and lease detention facilities rather than only manage them.”

Dunn’s appearance at this month’s Contract Review hearing was to receive approval for an extension to a nearly $11.5 million contract with Birmingham-based Hoar Program Management, LLC, to complete a study that would result in a request for proposal to build the three facilities.

Under a lease agreement, a company like CoreCivic will build prisons to the state specifications which is why even under a lease contract, the Ivey administration would need RFP which Hoar is tasked with delivering.

Two lawmakers who spoke with APR on background think that leasing prisons may not be the ideal solution, but it avoids much of the legislative in-fighting that doomed new prison construction in the past.

As one of the lawmakers explained, “During the Wallace era prisons and community colleges were built in specific locations as a sort of patronage system for the Governor’s buddies.”

Gov. George Wallace was known for generous hand-outs to his cronies, and in some cases, this meant building a community college campus or a correctional facility.

“Once a community has a college or a prison they are not going to want to give it up because it means jobs and votes for legislators, county commissioners, and profits for those up and down the food chain,” another lawmaker said.

Also convincing a supermajority of Republican lawmakers to approve a billion dollar bond offering seems unlikely with the Governor simultaneously pushing for a fuel tax increase.

One of the most significant and rarely mentioned accomplishments of the Legislative agenda enacted by the Republican supermajority has been the passage of prison reform bills, which have dramatically reduced prison overcrowding from 198 percent capacity in 2013, to 153 percent in 2018.

A report by the Council of State Governments found, “Alabama state leaders have appropriated $26.5 million in the FY2019 budget to support justice reinvestment legislation enacted in 2015. This includes $18.5 million to hire probation and parole officers and staff and expand behavioral health community-based treatment and services, as well as $8 million to support community corrections programs (CCPs). This appropriation brings Alabama’s total reinvestment between FY2016 and FY2019 to $95.6 million.”

Another result of Legislative intervention is the number of non-violent offenders has been reduced dramatically, going from a prison population of 35 percent non-violent to now under 14 percent. An unintended consequence of not locking up non-violent offenders is a very violent population inside the prisons, making it more dangerous for correctional officers.

While prison funding is up, and the overall population is down over the last four years, the aging facilities and understaffing is a persistent issue of concern.

In Nov. 2017, Gov. Ivey floated the idea of leasing built-to-order prisons. Now, at least a few of her supporters think it’s the time to utilize that option rather than trying to corral lawmakers into supporting a billion dollar bond to built three mega-prisons.

Economy

Ivey awards first broadband accessibility grants

Brandon Moseley

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Alabama Gov. Kay Ivey announced the first ever grants from Alabama’s Broadband Accessibility Fund.

Residents in seven Alabama communities will be afforded access to high-speed internet thanks to the grants, totaling almost $1.1 million. The fund was created by the Alabama Legislature and signed into reality in March 2018 by Gov. Ivey.

“These grants may only represent one step in terms of providing high-speed internet opportunities to rural Alabama, but it is a monumental leap for a program that has the ability to positively impact the lives of so many people,” Gov. Ivey said. “By supplying these services to rural Alabama, we are also providing these areas the ability to step up in education, health care and economic development.”

The Broadband Accessibility Fund provides funds for service providers to supply high-speed internet services in unincorporated areas or communities with 25,000 people or less. Under the law, awards cannot exceed 20 percent of the total cost of a project.

Ivey placed the administrative duties of the Alabama Broadband Accessibility Fund under the Alabama Department of Economic and Community Affairs (ADECA).

“Providing broadband services to Alabama’s rural communities is in many ways the equivalent of providing those same areas with electricity in early 20th Century,” ADECA Director Kenneth Boswell said. “ADECA and Gov. Ivey share the goal of supplying this essential service to every part of Alabama.”

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Grants awarded and coverage areas are:

Millry Telephone Co. Inc. of Millry will receive $938,306 for expanding coverage to incorporated areas of Gilbertown and Toxey and some unincorporated areas in Choctaw County.

Marcus Cable Associates of Birmingham will receive $11,022 to expand coverage in the East Wood Point area in Moulton.

Marcus Cables Associates of Birmingham will receive $11,063 for expanding coverage in the Emerald Ridge area in Chelsea.

Charter Communications will receive $29,567 to expand coverage to Glen Ridge in southwest Tuscaloosa County.

Charter Communications was awarded $6,017 to provide coverage to the Grace Haven subdivision in Boaz.

Charter Communications received $8,415 to provide coverage in the Vickey Lane area in Boaz.

Farmers Telecommunications Cooperative Inc. will get $74,586 for providing broad band coverage in the Pea Ridge community near Henagar.

Governor Ivey added on social media, “I’m proud to announce that almost $1.1 million in grants are being awarded in an effort to increase broadband access in rural Alabama. This is a major step forward for these 7 communities. A gain for rural Alabama is a gain for our entire state.”

State Senator Clay Scofield (R-Guntersville) sponsored the legislation to create the Broadband Accessibility Fund.

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Lieutenant governor picks deputy chief of staff

Chip Brownlee

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The lieutenant governor has selected his deputy chief of staff.

Jess Skaggs, a former Alabama Department of Agriculture and Industries administrator, will be Lt. Gov. Will Ainsworth’s deputy chief of staff, his office said Thursday.

“As lieutenant governor, I plan for my office to be the most active and engaged in Alabama’s history, and Jess Skaggs has the experience, dedication, and energy necessary to help make that plan a reality,” Ainsworth said. “Jess has a deep desire to serve his fellow Alabamians and to make our state an even better place to live for all of its citizens. I’m happy to have him on my team as we work to provide Alabama with more jobs, better schools, and a higher standard of ethics among its elected officials.”

Skaggs previously served as the deputy commissioner for external affairs in the department.

He spearheaded economic development opportunities for the Department of Agriculture and Industries in that role. He also worked with the Alabama Legislature to promote the state’s agricultural industry and assisted the commissioner with public policy research.

Ainsworth was sworn in as lieutenant governor on Monday. He’ll begin presiding over the Senate when the Legislature returns for the 2019 session in March. Ainsworth said Monday that he plans to focus on economic development, education, job training and government ethics during his term.

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Aside from his experience in the ADAI, Skaggs has other experience in the Legislature that could come in handy for the lieutenant governor. Skaggs worked closely with two senators and five state representatives as the delegation director for the Baldwin County Legislative Office. In that role, he oversaw constituent services, drafted and researched legislation, and coordinated community service grants for the delegation members.

Skaggs worked on the bill that authorized improvements to Gulf State Park and the Lodge at Gulf State Park. That was at the behest of former State Sen. Tripp Pittman, for whom he worked as a legislative aide. Pittman who chaired the Senate Finance and Taxation Education Committee.

A graduate of Huntingdon College with a degree in political science and history, Skaggs has also worked on numerous political campaigns as a general consultant and fundraiser.

He and his wife, Charlanna, an attorney specializing in business law, have three daughters and one son.

 

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A look at other issues Ivey touched on in inaugural address

Bill Britt

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Among the 2,766 words in Gov. Kay Ivey’s inaugural speech, she addressed a few major themes and some gems and clues on critical issues that she wants to tackle over the next four years.

Roads and bridges were front and center in Ivey’s remarks, as were prisons, but within the text she emphasized other priorities, as well. Among those she mentions is the Port of Mobile, the 2020 Census, health care, rural economic development and statewide access to high-speed internet broadband.

“It can be easy to focus only on the issues that need the most immediate attention – such as education, roads, and prisons,” said Ivey toward the end of her speech. “[B]ut in reality, as we dig in and begin to address these issues, I hope the progress that we make will inspire us to tackle other pressing challenges, such as health care, rural economic development, access to broadband and other important issues.”

Port of Mobile

Ivey is fully committed to a fuel tax to upgrade the state’s infrastructure. She mentions roads and bridges several times during her address, adding ports to the mix in one key sentence. “After all, if we want to compete in a 21st-century global economy, we must improve our infrastructure by investing more in our roads, our bridges, and our ports.”

Alabama’s entire congressional delegation led by U.S. Senator Richard Shelby has endorsed modernization of the Mobile Harbor Federal Navigation Channel. Port modernization is one of the most significant proposed economic development projects in state history.

“The deepening and widening of the Port of Mobile will provide economic development opportunities throughout the entire state of Alabama,” said Sen. Shelby. “This project will create an avenue for exponential growth by facilitating and expanding commerce in the state. I look forward to continuing our work with the Corps as we strive to improve the safety and efficiency of the Port in an increasingly global marketplace.”

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Alabama delegation supports Port of Mobile navigation improvements

Gov. Ivey, like Senator Shelby, understands that modernizing the Port of Mobile would fund significant infrastructure projects.

2020 U.S. Census

Also during her address, Gov. Ivey made a point of stressing the 2020 U.S. Census, which could not only cost the state a congressional seat but much needed federal funding that underpins the state government operations.

“And speaking of our Congressional Delegation, my Administration has already been hard at work with local and state leaders in all 67 counties to begin the tedious — but all-important task of making sure we get an accurate headcount for the upcoming Census,” said Ivey.

As APR’s Brandon Moseley reported, “A recent study by George Washington University indicates that the U.S. government returned more than $1,567 to the state in 2015 for every Alabamian counted in the census. More than 100 federal programs use data collected during census counts as part of their formulas to distribute billions of dollars in federal funding to the states. Those programs include Medicaid, Medicare Part B, Supplemental Nutrition Assistance Program, Highway Planning and Construction, and Title 1 Grants to Local Education Agencies. Census-derived data also is used to allocate seats in the U.S. House of Representatives and in legislative redistricting.”

Ivey establishes statewide group to prepare Alabama for maximum Census participation

Health Care

Alabama Republican politicians have ignored the question of Medicaid expansion or rejected it outright, but there are recent signs that resistance is softening.

“Despite what appears to be a solid opposition among Alabama Republicans, some public health experts and hospital officials, including the Alabama Hospital Association, are issuing dire calls for a renewed debate,” reported APR’s Chip Brownlee.

“Medicaid expansion is the one thing the state can do to prevent more hospital closures, loss of jobs, and cutbacks on services,” said Danne Howard, the association’s chief policy officer.

“The association — and the more than 100 individual hospitals it represents across Alabama, many of them rural and some of them teetering on the edge of closing — view the situation as so dire that the association plans to launch a renewed effort early next year to bring the discussion back to the forefront ahead of the 2019 legislative session, when a new class of state lawmakers will take office,” according to Brownlee.

While Ivey only mentions health care in one passage, it is no doubt on her mind.

Should Medicaid expansion be on the 2019 legislative agenda? Experts say it has to be

Broadband Access

In Aug. 2018, Ivey joined Congressman Robert Aderholt, R-Haleyville, and others to promote the benefits of rural broadband and announce that Aderholt has secured $600 million for USDA to increase access to broadband in rural America.

“High-speed, high-quality connectivity is essential to modern day life. It’s a necessary component to education, commerce & quality healthcare,” Ivey said.

Aderholt said that “Securing $600 million for rural broadband wasn’t the end of our mission, but just the beginning. Today, Anne Hazlett- Assistant Secretary for Rural Development at the U.S. Department of Agriculture and I talked about the next steps to bring broadband to all of Alabama.”

Bringing broadband to rural Alabama

Rural Economic Development

PowerSouth President and CEO Gary Smith wrote about the need for rural economic development in September of last year. After enumerating the successful economic opportunities in other parts of the state, he asked, “But what about the rest of Alabama? What about Selma, Eutaw, Greensboro, Andalusia, Greenville, and so many other communities? Those communities have succeeded in the past with textiles, agriculture, military, and lighter industries. However, many of them have fallen on hard times. What will rural Alabama look like in 20 years?”

Smith highlighted three areas that need improvement so that rural communities can be competitive.

“It is clear that good-paying jobs locate in areas with better education, medical care, and communications services,” he wrote.

The Alabama House Rural Caucus is ready to use its energy to gain support for rural cities and counties and can be a great asset to Gov. Ivey. Rural Caucus Chair David Standridge, R-Hayden, recently said, “A vast majority of Alabamians live in rural areas, and it is vital that their voices be heard in the Legislature and throughout all of state government. From rural healthcare to broadband internet access, to improving our roads and bridges, there are serious issues that must be addressed to improve the quality of life of those who live away from major urban centers. I, along with my colleagues, remain committed to protecting rural Alabama.”

Alabama House Rural Caucus re-elects David Standridge as chairman

Toward the end of her speech, Ivey made a plea to all Alabamians to join her in a quest to make the state even better.

“The campaign season and elections are long since behind us. Today, all Alabamians – regardless of party affiliation – have the chance to stand together, united, to help build a brighter future and guarantee that our best days are still in front of us.

And we need everyone to help… teachers, farmers, job creators, health care professionals, law enforcement and the media.”

Ivey’s inaugural address leaves tempting clues on her full agenda.

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Ivey: Pelham to resign, Bonner to take over as chief of staff

Josh Moon

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Chief of Staff Steve Pelham is officially resigning from Gov. Kay Ivey’s office, a release from the governor’s office said Tuesday morning. Former congressman Jo Bonner will take Pelham’s spot.

Pelham’s resignation was first reported by APR earlier on Tuesday.

“Steve has been a close friend and a trusted confidant for a number of years and has provided our office with outstanding leadership,” Governor Ivey said.  “When we made the transition to the Governor’s Office in 2017, Steve was responsible for leading the effort to make certain the Ivey Administration was up and running on day one.  He has maintained that level of commitment to our organization, structure and focus to details throughout our first term together.”

Bonner joined Ivey’s staff in December as an advisor — a move that seemed to be in preparation for Pelham’s eventual departure.

“Jo brings a wealth of experience and knowledge to our administration,” Ivey said, “and I know we aren’t going to miss a step as my cabinet, staff and I work, every day, to honor the support and confidence the people of Alabama gave us last November.”

Pelham will become the new Vice President for Economic Development and Chief of Staff to Auburn University President Steven Leath in February.

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Could leasing be the answer to new state prisons?

by Bill Britt Read Time: 4 min
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