Senate committee gives favorable report on bill to expand prison borrowing authority amid rising costs

A Senate committee on Wednesday gave a favorable report to Senate Bill 60, a measure that would authorize the state’s capital financing authority to seek an additional $500,000,000 in borrowing power to help fund construction of two prison facilities.

The bill’s sponsor, Senator Aubrey, told the committee the cost estimate for the Elmore facility has increased from the $785,000,000 the Legislature originally set aside to about $1,086,000,000 for that single facility and that overall costs have risen because of inflation and other pressures. "The proposal that's before you is to give a CIFA ... the borrowing authority ... to potentially borrow an additional $500,000,000," Aubrey said.

The nut graf: supporters said the additional authorization would provide flexibility to complete both facilities and avoid stopping construction midproject; opponents and some committee members pressed for detail on repayment, cost savings and whether the state should alter project delivery methods to control overruns.

Committee discussion focused on updated cost estimates, the state’s remaining borrowing capacity and the court-ordered staffing obligations tied to the prison projects. Aubrey said the state had sold $500,000,000 in bonds earlier and had about $285,000,000 remaining borrowing capacity from that authorization. He described the $500,000,000 in the bill as potential additional authority that may not be fully used but would allow the state to "move smoothly and as quickly as construction will allow to build and have both those facilities up and operational." The transcript records the arithmetic the sponsor used: original authorization plus $285,000,000 remaining capacity plus the proposed $500,000,000 would raise potential borrowing capacity to roughly $1,285,000,000.

Senator Stutz asked how the state would repay the additional debt and how much operational savings the Department of Corrections expects from more efficient facilities. "How much of this debt are they gonna be able to service by, having a more efficient, physical plant?" Stutz asked. Aubrey replied that earlier plans that relied on operational savings were not adopted and that the current plan does not assume large net savings because the state faces both rising inmate populations and increased staffing costs. Aubrey also noted a court order requires hiring roughly 2,000 staff, a continuing obligation the state must meet.

One committee member said conversations with the chair and the governor's finance director indicate the state intends to bid the project before beginning construction so it can establish a firm price prior to starting, a delivery decision presented as a step to limit cost uncertainty. Aubrey and other speakers also urged committee members to visit the Elmore site, which they said is being overseen daily by legal and construction teams.

The bill does not require immediate borrowing or set a firm timetable for issuance; the sponsor described the authority as flexibility to choose timing and market conditions. The committee recorded a favorable report and moved the bill forward.

Ending: The transcript shows the committee voted in favor and gave SB60 a favorable report; the bill will proceed to the next legislative step. No final floor action or borrowing issuance timetable was specified in the committee record.