MADISON - Governor Bob Riley announced the allocation of $236 million in interest-free bonds to help all 46 school systems that applied from across Alabama to finance the construction or repair of public school buildings. Thursday's announcement is for the first half of the $236 million. The governor's office says the other 50% is anticipated in early 2010
"Modern and safe schools will help better prepare our students for the future," Governor Riley said. "With these bonds, systems can repair, renovate, and construct much-needed schools while also stimulating our economy."
"The ability of the state to sell bonds for all school systems at once was brought about by a bill adopted in the Special Session of the Legislature earlier this year," said State Superintendent of Education Dr. Joe Morton. "It gets the money to the systems quicker and at less cost than all 46 systems trying to individually do this-it's a win-win situation for Alabama."
Governor Riley and Dr. Morton made the announcement Thursday at Bob Jones High School in the Madison City School System. That system is one of four school systems that will experience a surge in student enrollment brought on by the state's success in the most recent military base realignment and closure process known as BRAC.
At Governor Riley's direction, those four systems - Madison City, Limestone County, Lee County and Phenix City - are receiving significant funding for new school construction and repair. The Governor fully supports providing funds to these four BRAC-impacted school systems in order to accommodate student growth.
"Because Alabama did so well in the latest BRAC round, I know these four systems need extra help to accommodate the higher number of students coming in to their schools," Governor Riley said.
The Madison County and Huntsville City School Systems, which will also experience growth due to BRAC, did not request bond money. Birmingham, Mobile County, and Montgomery County schools are receiving separate allocations designated by the federal stimulus law for large school systems.
Allocations for the other school systems are based on a formula taking into consideration each system's ability to repay the bonds, the percent of students on free or reduced lunch, and per-pupil expenditures from local funding sources.
The bonds are part of a new federal program created by the economic stimulus law that Congress passed earlier this year. The Qualified School Construction Bond program provides tax credits to bondholders, as opposed to tax-exempt interest, which allows bonds to be offered with no interest.
Governor Riley signed a law earlier this year allowing the state's Public School and College Authority to issue the Qualified School Construction Bonds for local school systems. Using the PSCA saves money for local school systems on bond issuing costs and annual payments.
This bond money is in addition to earlier allocations Alabama schools received from a $1.07 billion school construction bond that Governor Riley signed into law in 2007. That bond issue provided funds for construction and repairs to every city and county K-12 system as well as public four-year and two-year colleges.
Click here to view the distribution of bonds to school systems.