Gov. Ivey proposes record budgets for general and education funds

Published 12:56 pm Thursday, March 23, 2023

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On March 21, Alabama Gov. Kay Ivey issued her budget proposals for 2024 for both the general fund and education fund to the Alabama Legislature, which would be the biggest budgets for either fund in state history.

Ivey requested $2.97 billion in spending for the general fund – $230 million more than the 2023 budget – which is an 8.4 percent increase. The increase comes after the state saw a large increase in tax revenue over the past year, as well. Ivey’s request for the education fund is a record $8.8 billion, a 6.5 percent increase from 2023.

In addition to the budget requests, she also proposed a number of supplemental bills that would include a $400 tax rebate for state income tax filers, which will be funded by using part of a $2.8 billion surplus in the state’s Education Trust Fund (ETF).

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“Alabama, especially considering the state of the nation’s economy, is on sound footing,” Ivey said. “Our budgets are strong, and that is, no doubt, because of the fiscally conservative approach we have taken and continue to take.

“Just as every Alabama family budgets to invest, pay their debts and increase their savings, my budget proposals do just that for our state. From returning our taxpayers’ hard-earned dollars back to them to making historic investments in our students’ education, these budgets will help foster a strong Alabama today and a stronger Alabama tomorrow.”

If Ivey’s supplemental bill makes it through the legislature, Alabamians who filed taxes in 2021 will receive a $400 rebate sometime this year. Alabama raked in $10.4 billion in income taxes, sales taxes and other revenue that supports the state’s ETF leading to the unusually large surplus. Alabama Finance Director Bill Poole estimates that the total cost for the tax rebates will reach $966.8 million and taxpayers would receive those rebates an estimated 60-90 days following the bills approval by the State Legislature.

The general fund budget will include a 2 percent raise for state employees, the third straight year for such raises for state employees. The Alabama Medicaid Agency would also see a 9 percent increase in its budget, $863 million, and the Alabama Department of Corrections (ADOC) will see its budget increase to $662 million, a 10 percent increase, if the general fund proposal is passed.

Ivey also proposed another supplemental bill that will include an additional $200 million in spending, using left over funds from the previous fiscal year. Of that supplemental spending, $50 million will be added to the General Fund budget reserve, giving the state a total of $150 million in reserves. That would be the most since the reserve fund was created. An additional $40 million will go to early repayment of state debts.

A total of $43 million from the supplemental bill will go to the Department of Mental Health with $23 million of that going to construction costs for the Taylor Hardin Secure Medical Facility in Tuscaloosa; $10 million would go for reopening the Pickens County Hospital; and $10 million would be for renovations at East Alabama Medical Center in Opelika.

A total of $12 million will go to the Alabama Forestry Commission, including $10 million in grants for volunteer fire departments and rescue squads along with $2 million to replace firefighting equipment. A total of $8 million will go to upgrading elevators at the State Capitol, $8 million to the Alabama Law Enforcement Agency for a computerized criminal history system, $5.7 million to the Military Department for construction costs at the Huntsville Armory, $5 million for repairs at the surplus property of the Alabama Department of Economic and Community Affairs in Montgomery, $4.8 million to the Department of Forensic Sciences for equipment at the Huntsville and Dothan labs and a total of $1.9 million for repairs at the Heflin-Torbert State Judicial Building in Montgomery.

The education budget, if passed, will include $604 million for K-12 schools. This includes $360 million to cover increased costs of construction for schools, $150 million for rural school systems in most need of capital improvements, $24 million for summer math camps, $25 million for the Saban Discovery Center, $10 million for startup costs for charter schools, $10 million for school safety grants, $10 million for college and career readiness grants, $10 million for the Teacher’s Liability Trust Fund and $5 million for Junior Achievement of Alabama.

Local boards of education throughout the state would also receive $59 million to help schools that are most in need of buses and for pay increases for teachers and support personnel.

Colleges will also be receiving funding in the budget and supplemental bill earmarked for facility needs. Troy University will receive a total of $33.5 million, while the University of Alabama, UAB and Auburn University will each receive $58.2 million. The University of South Alabama will receive $36.9 million, Alabama-Huntsville will receive $19.3 million, Jacksonville State University will receive $17.7 million, North Alabama will receive $15.2 million, Alabama A&M will receive $11 million, Auburn-Montgomery will receive $11.2 million, West Alabama will receive $10.6 million, Alabama State receives $8.4 million, Tuskegee will receive $7 million, Athens State will receive $6.8 million and Montevallo will receive $5.5 million.

The Alabama Community College System will also receive a total of $252.4 million with $100 million earmarked for prison education programs, $30 million for upgrading career tech facilities and the other $122.4 million for other facility needs.

Other funding in the general fund budget would include $200 million to the Department of Economics and Community Affairs for grants for revitalization and development of rural areas through the Main Street Alabama program. The Department of Commerce would also receive a total of $164.5 million, which is earmarked to be split up into funding for the Mobile Airport Authority ($31 million) for relocation, the Port of Alabama for economic development ($25 million), Montgomery County Commission for economic development ($25 million), an electric vehicle workforce training center ($30 million), the World Games ($5 million), the Challenger Learning Center ($8.5 million), Lauderdale County Commission ($12 million) for a hydroelectric workforce training center and the Alabama Site Development Fund ($10 million) for State Industrial Development Authority grants.

In the supplemental appropriation proposal, PEEHIP ($59 million), the Alabama Innovation Fund ($35 million), Alabama School of Healthcare Sciences ($31 million), the State Insurance Fund ($20 million), debt services ($18.5 million), funding of Pre-K classrooms in high-need areas ($4.1 million), statewide magnet schools ($3 million), the Department of Rehabilitation Services ($2.3 million), the Marine Environmental Science Consortium ($2 million) and the Alabama Space Science Exhibit Commission ($2 million) will all receive funding.

All of Ivey’s proposals must go through the regular legislative process, meaning both the State Senate and the House must agree an how to spend the amounts and then pass the proposals.