Birmingham-Southern Faculty is suing Alabama treasurer Younger Boozer III (proper) for denying a mortgage software, which officers say might immediate the school’s sudden closure.
Photograph illustration by Justin Morrison/Inside Greater Ed | Jwrandolph/WikimediaCommons | State of Alabama
Confronted with the prospect of closure, Birmingham-Southern Faculty final yr made an attraction to the state of Alabama for a lifeline. Laws written by a Birmingham-Southern graduate and handed in June provided simply that: a state mortgage program for struggling non-public faculties.
Now Birmingham-Southern is suing the Alabama state treasurer for allegedly denying the establishment entry to the funds it was certified to obtain, in accordance with particulars from the lawsuit the school filed Wednesday afternoon.
A press launch from Birmingham-Southern says that the school had engaged in “good religion discussions” with state treasurer Younger Boozer III for a number of months. “Sadly our religion has been betrayed,” Birmingham-Southern president Daniel Coleman stated within the assertion.
BSC’s Mortgage Denial
The non-public Christian school discovered itself on the point of closure final yr because of a mixture of elements. For starters, BSC’s enrollment and endowment have each declined in recent times.
BSC’s enrollment slipped from greater than 1,500 in fall 2010 to 1,058 in fall 2021, in accordance with information from the Division of Training’s Built-in Postsecondary Training Information System. And its endowment, as soon as valued at greater than $110 million, shriveled to about $53 million as the school launched a number of main constructing tasks and felt the squeeze of the Nice Recession starting in late 2007.
Monetary mismanagement additionally performed a job within the school’s woes. In 2010, officers found they’d incorrectly calculated Pell Grant awards, inflicting the school to overpay by tens of millions. That prompted deep funds cuts and important layoffs; a number of officers subsequently resigned, and the establishment has since cycled by means of 4 full-time presidents.
Getting ready to closure, BSC appealed to native lawmakers in late 2022. Whereas state politicians initially balked at a public bailout for a non-public school, they ultimately crafted a invoice making a mortgage program for distressed establishments. The qualification for the mortgage invoice, written by State Senator Jabo Waggoner, a 1960 BSC graduate, appeared nearly tailored for Birmingham-Southern: eligible faculties should have operated within the state for 50-plus years, be in monetary misery that would power a closure and have property accessible to make use of as collateral.
“That is the regulation we have to save Birmingham-Southern Faculty,” Waggoner advised fellow senators in establishing the $30 million mortgage program, which was precisely the quantity BSC initially sought from the state to remain open. (Based on the lawsuit, the school is now requesting $27 million by means of the mortgage program.)
The State Treasurer’s Workplace established the mortgage program in late August. Birmingham-Southern filed its software on the day this system opened, the school famous in supplies shared with Inside Greater Ed.
However on Wednesday, Birmingham-Southern officers obtained a shock letter from Boozer denying the school’s mortgage software, that means it could not get the funds.
“This adopted months of discussions wherein the treasurer gave no indication by any means that any facet of BSC’s software was wanting, or that he wouldn’t act because the Legislature supposed after they wrote and handed the Mortgage Fund invoice,” Coleman stated within the information launch.
When Inside Greater Ed requested Boozer for a remark, deputy treasurer Gloria Allred replied by electronic mail, “As a result of this matter is in litigation, the Treasurer won’t be commenting right now and appears ahead to aggressively defending this lawsuit.”
The Lawsuit
Birmingham-Southern Faculty filed a lawsuit Wednesday afternoon in Montgomery County Circuit Court docket, asking the court docket to compel Boozer’s workplace to disburse the mortgage by Oct. 30. It has additionally sought an emergency order to expedite discovery and a listening to.
The lawsuit argues that Boozer “lobbied the Legislature to try to kill” the mortgage program earlier than it turned regulation and that he has basically exercised an illegal veto of established laws.
“Relatively than fulfill his responsibility, the Treasurer has undermined the Legislature,” the lawsuit states.
The lawsuit additionally factors to the dire monetary wants of the establishment. It accuses the treasurer of unnecessarily delaying the mortgage software and making “inconsistent and contradictory calls for” of the school “relating to what he considers sufficient collateral all through the method.” It alleges that Boozer “has acted in dangerous religion, past his authority, and/or underneath a mistaken interpretation of regulation” and has “abused his discretion and acted arbitrarily and capriciously.” The lawsuit accuses Boozer of delaying a call on the mortgage software “till the Faculty might now not afford to function, and to trigger as a lot hurt as doable to the Faculty and its constituents.”
The movement for an emergency listening to states that with out court docket intervention in reversing the mortgage denial, the school faces the prospect of closing “by the top of the autumn semester, costing 292 jobs for its workers and sending the lives of its 731 full-time college students and their households into chaos.”
In obvious anticipation of state reduction, BSC trustees voted earlier this yr to maintain the school open.
If Birmingham-Southern does shut down, it is going to be a part of different establishments which have introduced closures this yr, together with Lincoln Christian College, Alderson Broaddus College, Alliance College, Cabrini College, Cardinal Stritch College, Finlandia College, Hodges College, Holy Names College, Iowa Wesleyan College, Medaille College and Presentation Faculty.
