Alabama budgets could start moving despite friction over General Fund

State representatives gather in the chamber of the Alabama House of Representatives on Feb. 20, 2024 at the Alabama Statehouse in Montgomery, Alabama. (Brian Lyman/Alabama Reflector)

Three of the Alabama Legislature’s budget chairs said Friday that the state’s two budgets could start moving this week.

But Rep. Rex Reynolds, R-Huntsville, and Sen. Greg Albritton, R-Atmore, the chairs of their respective chambers’ General Fund committees, said in separate interviews that there were disagreements over that budget, which provides money for most noneducation programs in the state. 

Reynolds said Friday that he and Sen. Greg Albritton, R-Atmore, had met the previous day and worked through some of the House’s priorities, though he declined to discuss specifics. 

“Until we’ve got some compromise there with both the House and Senate, it’d be premature for me to put those out there,” he said.

Reynolds said the chambers seemed to want to prioritize funding for the Alabama Law Enforcement Agency (ALEA); the Alabama Department of Corrections; the Bureau of Pardons and Paroles and the Alabama Department of Human Resources.

Rep. Rex Reynolds, R-Huntsville, in the chamber of the Alabama House of Representatives on Tuesday, June 6, 2023. (Stew Milne/Alabama Reflector)

Albritton said the chambers “have differing opinions on and lots of questions about” funding for the Alabama Department of Mental Health; ALEA; district attorneys; courts; the Department of Corrections and Pardons and Paroles.

The senator said that he and Reynolds “are talking at least weekly on (the budget) and have been for some time.” He said they don’t agree on everything but are trying to keep friction to a minimum and are making progress, which he said means “there’s a lot of hands in the pie and a lot of differing opinions.”

“At this stage, I’m afraid anything’s gonna be difficult to get out of the Senate,” he said. “We’ve got so many things hovering about in the Senate that we’re running a little bit late on. Time’s running out, and so I think it’s gonna be an interesting final one-third (of the session).”

Caution urged

The budgets for the 2025 fiscal year, which starts on Oct. 1, come after years of unprecedented growth, fueled in part by federal spending on COVID relief. State budget officials have projected reduced but healthy increases next year in the General Fund and the Education Trust Fund (ETF) budget, which funds public K-12 and higher education programs in the state.

Sen. Greg Albritton, R-Atmore, stands on the floor of the Alabama Senate on Feb. 8, 2024 in Montgomery, Alabama. (Brian Lyman/Alabama Reflector)

Gov. Kay Ivey proposed an 2025 ETF budget of $9.348 billion, a 6.25% increase over the current $8.8 billion budget, and a General Fund budget of $3.299 billion, an 8.16% increase over the current $3 billion budget. The Legislature has the final say over the shape and scope of state spending.

Officials with the Legislative Services Agency have urged caution with spending, and Reynolds said he was concerned that interest on state accounts, a major revenue source for the General Fund, could decline later this year. 

“I think that’s why we’ve got to be frugal and just use those for one time funding. And there’s some capital needs of our state agencies that we want to address,” he said. “And in going into the 2026 budget, it might be a different outlook.”

Albritton said additional funding over the past two years has not necessarily solved problems for some agencies, and said that some departments are duplicating services.

The senator said he was not calling for cuts, but said the governor has priorities and that all the other legislators have ideas about spending.

“That’s the minuet we’re trying to figure out,” he said.

Albritton said he hoped to have the budget in committee this week but would not commit to when a Senate vote might take place.

ETF could debut this week

Rep. Danny Garrett, R-Trussville, the chair of the House Ways and Mean Education Committee, said Friday he hopes to have two committee meetings on the ETF on Wednesday and Thursday, with a goal of a floor vote the week of April 8.

Garrett said they were looking at things that would “move the needle” for students, like the Literacy and Numeracy Act, which aim to increase scores in their respective subjects.

“We’ve got a lot of underperforming schools, we’ve got schools with high ESL [English as a second language] populations, we’ve got schools with significant capital needs,” he said. “Schools have technology challenges, teacher shortages. We’re doing what we can to try to address all of those type things.”

Messages were left for Senate Finance and Taxation Education Committee Chair Arthur Orr, R-Decatur on Friday. Garrett said he and Orr were in agreement on the budgets. 

In her State of the State address on Feb. 6, Gov. Kay Ivey said she wanted to increase the starting pay for teachers.

Rep. Danny Garrett, R-Trussville, stands on the floor of the Alabama House of Representatives on Feb. 29, 2024 at the Alabama Statehouse in Montgomery, Alabama. (Brian Lyman/Alabama Reflector)

Garrett said that one of the changes to the budget this year was a secondary cap on the budget. He said last year was 6.5%, this year is 6.25% and they will eventually go to 5.75%.

“So we’re limiting the amount of growth that can happen in the budget, and so that’s the second year of that going on,” he said.

He said legislators were also looking into releasing more advancement and technology funds.

With the passage of the CHOOSE Act, a voucher-like bill that allows households to claim up to $7,000 per student for non-public education expenses, including private school tuition, Garrett said that they are looking at the way they fund education.

“And we may be taking some steps toward trying to move in the direction, but the main point is that we have to make sure that we’re spending the money where we think it’s going to improve outcomes,” he said.

Last session, the Legislature created the new Educational Opportunities Reserve Fund in the Education Trust Fund. Garrett said they are not looking to use the funding this year, but they might use it if they change formula for how the state funds schools.

“If we talk about addressing our funding formula, if we move in that direction, that fund can be helpful as we transition to something like that,” he said. “But, at this point, there’s no really identified use for that. It’s just something that’s available and we’ll continue to add that fund this year as well.”

While the a vote on the General Fund is less clear, Reynolds said he thinks he and Albritton are on the same page with the budget.

“I think so,” he said. “It’s, I mean, it’s a two-house process, right?” he said.

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