U.S. Treasury Department sends mixed messages on Alabama's use of COVID money for prisons

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The U.S. Treasury Department this week sent mixed messages on whether Alabama could spend $400 million in federal COVID relief money on new prison construction.

A final rule released on the use of the money said it did not consider prison construction an eligible use of the State and Local Fiscal Recovery Funds (SLFRF), COVID relief money aimed at allowing local governments recover revenue lost during the pandemic.

At the same time, compliance language released with the rule said the department would “generally not take action to enforce provisions contained in the final rule” if a government had begun spending those funds consistent with an earlier, broader rule on how to use them.

“Such significant steps include initiation of procurement or grantmaking actions, detailed planning of projects or programs, appropriation of funds, and other significant planning steps,” the compliance language said.

It was not immediately clear what if any impact the rule would have on the state’s $1.3 billion prison construction project, which would place at least two 4,000 bed men’s facilities in Elmore and Escambia counties. Kirk Fulford, deputy director of the Legislative Services' Agency fiscal division, wrote in an email Thursday that he did not expect the rule to affect prison construction, due to language around revenue lost by governments during the pandemic. That was where the COVID prison money came from and was given broad usages.

Gov. Kay Ivey, middle speaks with Mike Lanier, left, president of HPM leadership, and Jeff Dunn, right, Commissioner of the Alabama Department of Corrections, in this file photo.
Gov. Kay Ivey, middle speaks with Mike Lanier, left, president of HPM leadership, and Jeff Dunn, right, Commissioner of the Alabama Department of Corrections, in this file photo.

"The not exhaustive list of allowable expenses of the 'lost revenue' includes 'any service traditionally provided by the government, including construction of roads and other infrastructure, etc.,'" Fulford wrote. "Using 'lost revenue' for prisons is a government service and allowable under the rule."

Messages seeking comment were left with Gov. Kay Ivey’s office, the Alabama Department of Corrections (DOC) and the U.S. Treasury Department on Thursday.

More: Gov. Kay lvey signs $1.3 billion prison construction bill

Even if it allows Alabama to use COVID money on prisons, the Treasury Department may be warning other states to avoid Alabama's example. The final rule on Coronavirus State and Local Fiscal Recovery Funds, which goes into effect on April 1, made it clear that the department would not consider COVID an acceptable reason for building new prisons under the new rule. That was the argument DOC made in a letter to Treasury in July.

“Additional recreational or exercise space could also be enhanced to encourage both physical health as well as encourage outside recreation, thereby reducing risk of infection,” DOC wrote. “Infrastructure to increase the number of celled beds will allow for better social distancing and will provide a less dense ‘household’; thereby lessening the risk of infection.”

"As we knew all along, spending COVID-19 relief funds on prison construction is inappropriate, particularly while healthcare workers, teachers, small business owners, and so many other people in Alabama are struggling during this ongoing pandemic," JaTaune Bosby, the executive director of the ACLU of Alabama, said in a statement.
"As we knew all along, spending COVID-19 relief funds on prison construction is inappropriate, particularly while healthcare workers, teachers, small business owners, and so many other people in Alabama are struggling during this ongoing pandemic," JaTaune Bosby, the executive director of the ACLU of Alabama, said in a statement.

Treasury officials did not seem convinced.

“Construction of new congregate facilities, which would generally be expected to involve expenditures greater than $1 million, would generally not be a proportional response to mitigate or prevent COVID-19, because such construction is generally expected to be more costly than alternative approaches or capital expenditures that may be equally or more effective in decreasing spread of the disease,” the Treasury’s final rule says.

The rule says governments must provide written justification for capital projects costing $1 million or more. But the department did not signal a willingness to fight Alabama over the use of the money.

“To the extent that a recipient has taken significant steps toward obligating SLFRF funds in a manner consistent with the interim final rule prior to January 6, 2022, Treasury will generally not take action to enforce provisions contained in the final rule, to the extent that they are more restrictive than those in the interim final rule,” the compliance rule said.

The Legislature approved the construction of two new men’s facilities last fall in a special session.

Corrections has long sought new prisons, arguing current facilities are out of date, unsafe for inmates and correctional staff, and lacking space needed for training and rehabilitation programs. Critics say new construction will not address the violence and overcrowding in Alabama’s state prisons, which has led to a federal lawsuit.

"As we knew all along, spending COVID-19 relief funds on prison construction is inappropriate, particularly while healthcare workers, teachers, small business owners, and so many other people in Alabama are struggling during this ongoing pandemic," JaTaune Bosby, the executive director of the ACLU of Alabama, said in a statement Thursday.

The state’s use of the COVID money on prisons drew criticism from U.S. Rep. Jerrold Nadler, D-N.Y.
The state’s use of the COVID money on prisons drew criticism from U.S. Rep. Jerrold Nadler, D-N.Y.

More: Decades in making, Alabama's prison crisis is bigger than declining buildings, critics say

The state’s use of the COVID money on prisons drew criticism from U.S. Rep. Jerrold Nadler, D-N.Y. In a letter sent to the Treasury Department in September, Nadler, the chair of the House Judiciary Committee, wrote that COVID money “should not be used to worsen our national problem of over-incarceration.” A message seeking comment was left with Nadler’s office on Thursday.

From September: New York congressman wants Treasury Dept. to block Alabama using COVID funds on new prisons

House Ways and Means General Fund chair Steve Clouse, R-Ozark, who supported the prison project and criticized Nadler's comments, said prisons were an issue that "had been dogging us" for years. COVID, he said, had caused deaths of inmates and staff within state prisons.

"This was putting new buildings in with better ventilation and more ventilation to space folks out," he said.

House Ways and Means General Fund chair Steve Clouse, R-Ozark, who supported the prison project and criticized Nadler's comments, said prisons were an issue that "had been dogging us" for years. COVID, he said, had caused deaths of inmates and staff within state prisons.
House Ways and Means General Fund chair Steve Clouse, R-Ozark, who supported the prison project and criticized Nadler's comments, said prisons were an issue that "had been dogging us" for years. COVID, he said, had caused deaths of inmates and staff within state prisons.

Contact Montgomery Advertiser reporter Brian Lyman at 334-240-0185 or blyman@gannett.com. Updated at 5:25 p.m. with comments from Kirk Fulford, deputy director of the Legislative Services Agency.

This article originally appeared on Montgomery Advertiser: U.S. Treasury Department sends mixed messages on Alabama's use of COVID money for prisons

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