It’s that time of year again! The 2023 Alabama Legislative Session will begin on March 7, during which important budgetary decisions will be made for Alabama’s schools. We have tracked the budget throughout the session until the Governor’s signature on June 1st.
Tuesday, June 6, 2023
FY 2024 ETF Budget Overview
On June 1, 2023, Governor Ivey signed both the Fiscal Year 2024 Education Trust Fund budget and the supplemental budget into law. After a number of major changes in funded priorities over the past few months, this was the end result:
Education Trust Fund (SB88)
Department of Early Childhood Education:
First Class Pre-K: The Office of School Readiness, which runs Alabama’s First Class Pre-K program, was increased to $181.6 million from $173.7 million in FY2023. This increase, combined with $4 million in the supplemental budget (see below), means a total of almost $12 million in new funding for expanding access to Pre-K.
The Foundation Program:
- Teacher Pay Raise: Teachers and education support personnel received a 2% pay increase this year.
- Classroom Materials: funding was increased to $1,000 per teacher unit, and 100% of these funds are now required to be used for in-classroom materials (as opposed to administrative needs)
- Support Staff Pay: Support staff employed by local boards of education are now required to be paid at least $15 per hour. This was funded through an additional $15 million in the Foundation Program.
Line Items through the ALSDE:
- Alabama Reading Initiative: funding stayed the same at $94.2 million, of which $36.8 million goes to pay for K-3 reading coaches
- Alabama Math Science and Technology Initiative (AMSTI): funding increased by $25 million for a total of $73.3 million
- Alabama Numeracy Act: funding was increased by $25 million for a total of $40 million
- Summer and Afterschool Program: This funding was moved from the Department of Early Childhood Education to the ALSDE and received an increase to $2.86 million
- Advanced Placement: funding stayed the same at $11.4 million
- Computer Science: funding was doubled to $6 million
- Office of School Improvement: funding was increased to $950,000
- the School Principal Leadership and Mentoring Act (SB 300): Funding for the implementation of SB300, the School Principal Leadership and Mentoring Act, was placed at $850,000. As a result, the Principal Mentoring Program line item was removed.
- College and Career Readiness Grants: funded at $15 million
Below you will find the overview of line items in the supplemental budget which will go toward tax rebates, capital projects, and other immediate investments in education. View the final bill here.
- Tax Rebates: Funding for rebates to taxpayers totaled $393 million from the supplemental budget. Enacted by SB86, the rebates will be $150 for singles and $300 for couples.
- Fleet Renewal: $20 million will go toward fleet renewal for school districts with the highest need.
- Student Materials: $20.5 million will be used to pre-fund half of the cost of the student materials line item in the Foundation Program so that teachers can purchase materials at the start of the school year.
- Capital Projects & Equipment: $360 million will go toward increases in capital project and equipment costs school systems are facing.
- Charter Schools: $10 million will go to currently existing charter schools.
- College and Career Readiness Grants: $10 million will go toward College and Career Readiness grants.
- Summer Math Campts: $24 million will be used for summer math camps required by the Alabama Numeracy Act.
- Saban Discovery Center: $17 million will go toward the new Saban Discovery Center.
- Support for Specific Schools: $6 million each will go to the Alabama School of Math and Science, the Alabama School of Fine Arts, and the Alabama School of Cyber Technology for capital projects and deferred maintenance.
- First Class Pre-K Waiting Lists: $4.1 million will go to the Department of Early Childhood Education to help create First Class Pre-K classrooms in areas with waiting lists.
- K-12 Capital Grant Program: $179 million will go to the Lieutenant Governor for the new K-12 Capital Grant program established by SB269.
- Educational Opportunities Reserve Fund: $354 million will go to the Educational Opportunities Reserve Fund, the new savings account for the state to use as growth in the Education Trust fund slows down or goes negative, as established by SB101.
- New Healthcare High School: $750,000 will go to the Legislative Services Agency to conduct a feasibility study on creating a new healthcare high school in the Black Belt.
Thursday, June 1, 2023
Governor Ivey Signs FY 2024 ETF Budget into Law
On Thursday afternoon, Governor Ivey signed the 2024 ETF budget into law. The budget totaled $8.8 billion dollars, a record-setting budget for the state. This is alongside a $2.8 billion supplemental budget See below for a step-by-step update of the budget process from this year. We will publish a full overview of the budget in the coming days.
Thursday, May 25, 2023
FY 2024 ETF Budget Passes AL House, Goes to Governor
It was a big week for budgets in the Legislature. On Wednesday, May 24, the House Ways and Means Education committee approved the Education Trust Fund budget package. The committee made changes to SB88, the Education Trust Fund, SB87, the supplemental budget, and more pieces of the budget package. On Thursday, May 25, the full House voted 102-0-1 to pass the budget. After a conference committee with the Senate that same night, both houses of the Legislature concurred and sent the budget package to Governor Ivey for her signature or veto. She has ten days to decide.
The House largely left the FY 2023-2024 budget passed by the Senate intact, including increases for First Class Pre-K, the Alabama Numeracy Act, Computer Science training, and the Office of School Improvement, to name a few (scroll down to our May 4 update on the Senate budget). Below is a brief overview of the changes made.
Education Trust Fund (SB88)
The ETF budget had few changes made (spreadsheet and bill here). The total budget remains the same at $8.8 billion, a 6.5% increase over last year, but some K-12 changes include the following:
- At-Risk Student Program: Increased from Senate passed version by $450,000, including two new pilot programs for at-risk students in Montgomery County schools at $200,000 each.
- Support Staff Salary Increases: The $15 million line item for support staff salary increase was removed. In its place, $15 million was added to the Foundation Program with language requiring that each employee at a local board of education make at least $15 per hour. The budget also still includes a 2% pay raise for all teachers and support personnel.
- Principal Mentoring: $438,907 for principal mentoring was removed entirely in the House committee version due to the $850,000 line item for implementing SB300, the School Principal Leadership and Mentoring Act (supported by A+), which the legislature passed on May 23.
- Classroom Materials and Supplies: The House kept the Senate’s $1,000 per teacher unit, but added an amendment to require that 90% of that go directly for in-classroom expenses (not administrative). The conference committee upped this requirement to 100%.
Supplemental Budget (SB87)
The record $2.8 billion supplemental budget (SB87) has seen many changes throughout the process, and the Ways and Means Education Committee has been no exception. The following are some of the changes made that impact K-12:
- Tax Rebate: The total amount of the tax rebate authorized in SB86 was changed from $275 million in the Senate version to $550 million in the House committee version, doubling the amount of the tax rebate to $210 per individual and $420 per couple. In conference committee, the rebate was reduced to a final $150 per individual and $300 per couple, reducing the total cost to $393 million. The Governor had originally proposed a $400 rebate that would cost over $1 billion.
- Educational Opportunities Reserve Fund: Funding allocated to the new savings account established by SB101 decreased from $500 million to $279 million. The conference committee added back $75 million, bringing the final total to $354 million. This additional savings account could be accessed if the economy slows and revenues for the Education Trust Fund drop.
- K-12 Capital Grant Program: The House decreased from $180 million to $104 million. The conference committee added back $75 million to the program, for a total of $179 million. The program, established by SB269, would provide grants of up to $5 million per project to go toward capital projects, deferred maintenance, and technology needs. Schools may be required to match funds up to 35% of the total cost of the project. Priority will be given to schools with considerable populations of at-risk students. The House added an amendment requiring that grant requests have the support of the House and Senate members from that legislative district.
- Specialty Schools: The Alabama School of Fine Arts, Alabama School of Cyber Technology, and Alabama School of Math and Science all maintained their $6 million appropriations in the supplemental. However, they are now also eligible for the K-12 Capital Grant Program administered by the Lieutenant Governor.
- New Health Sciences School: The Healthcare Sciences School in Demopolis proposed by the Governor has received an additional $250,000 for its feasibility study for a total of $750,000. The feasibility study has been moved from the Department of Examiners of Public Accounts to the Legislative Services Agency. The Governor had proposed $31 million to establish the school, but the Senate changed it to a feasibility study.
- Saban Discovery Center: Restored to $25 million in House committee version from $15 million
- Selma School Reconstruction: $1.75 million was added for the reconstruction of Selma elementary schools due to tornado damage.
Other items in the supplemental were unchanged from the Senate version of the Supplemental, including:
- $360 million for school systems to offset inflationary increases in capital project and equipment costs
- $24 million for summer math camps to support the Alabama Numeracy Act
- $4 million to the Department of Early Childhood Education for First Class Pre-K classrooms in areas with waiting lists,
- $20 million to highest need districts for fleet renewal,
- $20.5 million to pre-fund part of the expense for classroom materials teachers receive the funding at the start of the school year
- $10 million for existing charter schools
- $10 million for college and career readiness grants
- $30 million for the Distressed Higher Education Schools loan program, which (with the passage of SB278 on May 25) is expected to provide a loan to the financially-struggling Birmingham-Southern College.
The budget package went to the House floor and was passed on Thursday. Other pieces of the budget package, including the 2% teacher pay raise bill, were maintained. No major changes were made on the floor. Selected members of the House and Senate met in conference committee Thursday night to reconcile the House and Senate versions of SB101 (Educational Opportunities Reserve Fund), SB86 (tax rebate), SB88 (the Education Trust Fund budget), and SB87 (the supplemental budget). Next, it goes to the Governor to be signed.
Thursday, May 4, 2023
FY 2024 ETF Budget Passes AL Senate, Heads to House
On Wednesday, May 3, the Education Trust Fund budget for FY2024 passed out of the Senate Finance and Taxation Education committee with a favorable report. It was passed unanimously from the Senate Floor on Thursday.
Chairman Arthur Orr began the meeting with the most recent data on the Education Trust Fund receipts: the income to the ETF in April 2023 was down 32% compared to the income in April 2022. Most of that is due to a drop in income taxes being collected. This echoes comments from Director Kirk Fulford in March that current budget growth, as shown by the number of record-breaking ETF budgets in the recent past, is not sustainable and that legislators should be fiscally responsible.
There are a number of new developments since the budget package left the Governor’s office.
Education Trust Fund Budget:
The bottom line for the ETF (spreadsheet here, bill here) is the same at $8.8 billion. The Senate largely left the Governor’s proposed budget intact, including increases for First Class Pre-K, the Alabama Numeracy Act, Computer Science training, and the Office of School Improvement, to name a few (scroll down to our March 23 update for a full list). But, there were a few significant changes made to the Governor’s proposed budget, including:
Changes by the F&TE Committee under Local Boards of Education:
- New Special Education Teacher Stipend: allocated $4.6 million in committee
- School Nurses Program: increased by $15 million in the floor substitute, after a conversation in committee on increasing pay for school support staff, including nurses
- New Support Staff Salary Increase: allocated $15 million in the floor substitute to increase school support staff pay. This is a placeholder/estimate that will have to be worked out when the budget goes to the House. Currently, school support staff wages are determined by local school systems and may vary widely. Sen. Figures asked in committee about putting support staff pay on a statewide matrix similar to the matrix that teachers have, and Chairman Orr said that would be possible, but it would be expensive.
- At-Risk Student Program: increased by $1 million in committee – total of $22 million
- Teacher Pay Raise: $15.6 million increase in funding, for a total of $42.7 million, for fast-growing school systems
Changes by the F&TE Committee under State Department of Education:
- Speech Therapist Stipend Program: allocated $500,000 in floor substitute, per the conversation in committee mentioned above
- Principal Bill: allocated $850,000 (a bill has yet to be filed)
- Cameras in the Classroom Grant Program: allocated $500,000 (based on SB56)
The $2.8 billion surplus in the ETF will be allocated this fiscal year in the supplemental budget (SB87). The committee made significant changes to the Governor’s recommended supplemental, including:
- Tax Rebate: The $400 rebate to Alabama taxpayers recommended by the Governor (SB86) has been decreased. Originally, the total cost of the rebate was $966 million, but later estimates suggested that the rebate could total well over $1 billion. The committee cut the total to $275 million, which comes out to $105 per taxpayer ($210 for married filing jointly).
- Foundation Program Salary Matrix: increased by $5.5 million, total of $23.7 million
- Systems with the highest need for fleet renewal: decreased by $20 million, to $20 million
- Classroom Materials: allocated $20.5 million for teachers to access at the start of the 2023-2024 school year (the increase in classroom material funds in the ETF are normally not available until the start of the fiscal year in October 2023).
- School Safety Grants: increased by $30 million, total of $40 million
- Alabama School of Mathematics and Science: doubled to $6 million
- Alabama School of Fine Arts: doubled to $6 million
- Alabama School of Cyber Technology and Engineering: doubled to $6 million
- K-12 Capital Grant Program: allocated $185 million to be distributed through the Lt. Governor’s office for school systems that need assistance with capital projects, deferred maintenance, or technology needs (see SB269).
- Educational Opportunities Reserve Fund: $500 million allocated to a new savings account for the state (SB101) that can be used when growth slows down in the ETF (as compared to the Budget Stabilization Fund, which can only be used when growth in the ETF is negative or the state declares proration). This will be important for maintaining education spending if the economy goes into recession.
- New Distressed Higher Education Schools Loan Program (i.e. Birmingham Southern College): allocated $30 million for a new loan program that will help financially distressed colleges or universities in the state (SB278). This is the solution that legislators devised to help Birmingham Southern College recover from its recent financial issues.
Several items related to education were decreased or completely removed from the Governor’s recommended supplemental budget, including funding for the Saban Center (which was decreased from $25 million to $15 million) and for the proposed Alabama School of Healthcare Sciences in Demopolis (The Governor’s proposed $31 million to launch the school has been removed and $500,000 has been added for a feasibility study). Both were mentioned as priorities in the Governor’s State of the State speech.
Several items unrelated to education were completely removed from the Governor’s recommended supplemental budget, including $200 million for the Main Street Program, $31 million for the Mobile airport, $25 million for the Mongomery Whitewater park, $25 million for the Port of Mobile, and $5 million for the World Games. To read more about these cuts, check out Trish Crain’s article, linked here.
The budget package passed the full Senate today on a 35-0 vote and will move to the House Ways and Means Education Committee. There will likely be more changes throughout the remainder of the process, so be sure to check back here for updates.
Thursday, March 23, 2023
Governor Ivey Releases Proposed Education Budget
Through the Department of Early Childhood Education:
Office of School Readiness, which runs Alabama’s First Class Pre-K program, has a $7 million increase up to a total of $181.5 million. This will increase the percentage of four-year-olds with access beyond the current 44%.
Through the Foundation Program, which funds local school systems:
Teacher Pay, which is funded through the Foundation Program line item directly, will receive a 2% increase this year. This would increase starting teacher salaries from $43,358 to $44,225.
Classroom Materials received its requested increase to $1,000 per teacher unit, which is an increase from last year’s $900 per teacher unit.
Divisors for Teacher Units did not change. In its budget request, the ALSDE requested this to be changed to add more teacher units for middle schools.
Multipliers for School-Based Administration and Counselors did not change. In its budget request, the ALSDE requested these numbers to be adjusted to add more assistant principals, counselors, and school-based administrators to schools
Student Growth: $15.6 million increase in funding, for a total of $42.7 million, for fast-growing school systems
ETF Line Items through the ALSDE:
Alabama Literacy Act/Alabama Reading Initiative: funding stayed the same at $57.4 million
Alabama Math Science and Technology Initiative (AMSTI): funding was increased by $25 million for a total of $73.3 million
Alabama Numeracy Act: funding increased by $25 million for a total of $40 million
Advanced Placement: funding stayed the same at $11.4 million
Computer Science: funding doubled to $6 million
Afterschool and Summer Learning: $2.86 million, up from $1.5 million, moved from the Department of Early Childhood Education to the ALSDE to fund summer and afterschool programs in partnership with local school districts, municipalities, and nonprofits
Auxiliary Teacher Grant for Underperforming Schools: funding stayed at $5.4 million
Underperforming Schools: funding stayed at $10 million to support the Governor’s Turnaround Schools Initiative
Office of School Improvement: $950,000 increase in funding
College and Career Readiness Grants: $15 million in new funding to support the State Board of Education’s new policy that all students earn a college and career readiness indicator to graduate high school.
Career Coaches: $13.2 million, a $6.5 million increase over FY23
For the Supplemental Budget, which appropriates unused funding for the current fiscal year to cover one-time costs:
First Class Pre-K: $4.1 million for new classrooms in high-need areas to be added in the current year. This is in addition to the proposed $7 million increase for FY 2024.
Summer Math Camps: $24 million in one-time funding to support the summer math camps required by the Alabama Numeracy Act
Existing School Construction Projects: $360 million in additional funding for capital projects and deferred maintenance to address inflationary cost increases
Charter Schools: $10 million in one-time funding for existing charter schools
College and Career Readiness Grants: $10 million to support the State Board of Education’s new policy that all students must earn a college and career indicator to graduate. This is in addition to the $15 million proposed for next year’s budget.
Tax Rebates: $966 million in tax rebates for Alabama citizens ($400 for individuals; $800 for families). Governor Ivey laid this plan out in her State of the State address. Read our recap of her speech here.
Now that the governor’s budget proposal has been released, the Senate will begin its budgeting process for fiscal year 2024. The budget will go through the Senate Finance and Taxation Education committee. Check back in with Budget Watch for updates on changes in the budget that may occur in the committee, and the full budget process.
Tuesday, March 7, 2023
Fiscal Year ‘24 Budget Outlook
Today, Mr. Kirk Fulford, the Legislative Fiscal Officer, and State Finance Director Bill Poole presented to the joint committees of the Legislature about the state’s financial situation and the Governor’s FY2024 priorities, respectively.
The Legislature receives these presentations every year so that they have as much information as possible as they decide how to spend the state’s funds. Mr. Fulford warned members of the committees that there is a slowdown coming in the economy and that they should take that into consideration when budgeting this session.
EDUCATION TRUST FUND STATUS
For the past few years, growth in the Alabama economy (heavily fueled by one-time, federal COVID relief funding) has led to record-high budgets in the Education Trust Fund. Mr. Fulford’s presentation to the committees started with a review of the fiscal year that ended September 30, 2022 (FY2022).
For FY2022, there was a total of $11.7 billion available to spend. The Legislature has appropriated about $9 billion so far. This leaves a $2.9 billion dollar surplus in the Education Trust Fund at the end of FY2022, which ended September 30th of last year.
FY2023 (the current budget year) is also expected to have a surplus that could be as high as another $2.2 billion, bringing the estimated ending balance of FY2023 to over $5 billion. Legislators will decide whether to pass a supplemental appropriation bill to allocate some or all of these funds. It is important to remember that, while it is very large, the budget surplus is one-time money that is not sustainable. Mr. Fulford and Mr. Poole warned that lower growth or a recession is expected soon, so being fiscally responsible is critical.
For the upcoming FY2024 regular budget that Legislators will pass this session, there are a number of issues for the ETF that Mr. Fulford mentioned. These include the fiscal cliff coming for school systems to replace the federal COVID-relief funding districts received. In addition, the cost of capital projects for schools is increasing due to inflation, and recent investments the state has made into education such as the Literacy Act, Numeracy Act, and TEAMS Act, will also require increasing allocations to be implemented to fidelity.
GOVERNOR’S FY2024 EDUCATION PRIORITIES
Director Poole did not dive into specifics on the Governor’s budget proposal (Governor Ivey will release her full budget proposal after the State of the State address tonight), but he did outline some high-level items that legislators need to know.
The Governor’s Education Trust Fund budget proposal totals $8.79 billion, a 6.50% increase over FY2023’s budget (approximately $8.3 billion). Some key priorities in the Governor’s budget include:
- A tax rebate to Alabama taxpayers (due to the high budget surplus)
- Capital projects for K-12 schools, especially for deferred maintenance
- Teacher compensation
- Prioritizing Pre-K Expansion to High-Needs Areas
- Access to high-quality childcare
- State investments in education, including the Alabama Literacy Act, Alabama Numeracy Act, and Summer and Afterschool Programs
Summer and afterschool programs are currently funded largely with federal COVID relief funds. With these funds ending, Director Poole emphasized the importance of increasing the state’s investment in high-quality summer and afterschool programs to make up this gap and continue supporting students.
You can see Mr. Fulford’s presentation here and Director Poole’s presentation here. A+ will continue to follow the budget as it moves through the legislative process. Check back here for future Budget Watch blog updates.
Thursday, February 23, 2023
Superintendent Dr. Eric Mackey Presents Budget to Legislative Committees Pre-Session
Dr. Eric Mackey, Superintendent of Education – ALSDE Budget Request
Dr. Mackey highlighted the progress Alabama has made recently, including increases in NAEP ranking, computer science implementation, and the number of National Board Certified Teachers (NBCTs). You can see Dr. Mackey’s presentation here and the budget handout here. For his budget request to the Legislature, Dr. Mackey emphasized the need to fund the following line items:
- An increase in funding for teacher materials to $1,000 per teacher unit
- Under the Foundation Program, a $4 billion line item that directly funds local school systems:
- $49 million for changes to the principal & assistant principal multiplier, which would increase the number of school leaders
- $264 million in additional funding for an increase in teacher units, which Dr. Mackey tied to decreasing class size
- $99 million in additional funding for OCE, which is discretionary funding for local systems
There are a number of notable changes in the budget request for this year that were not highlighted. The State Board of Education, at their October meeting, approved the ALSDE’s FY2024 budget request. You can see the department’s budget request here, but here are some highlights:
- Advanced Placement: Increase of $2 million (bringing the total request to $13 million) to continue expanding access to AP courses statewide.
- Principal Development: This includes two new line items to train new principals on how to administer the Alabama Teacher Growth Program ($5 million), as well as $2 million for the Leadership Academy Expansion to support principals and assistant principals across the state
- Computer Science: An additional $750,000, bringing the total request to $3,750,000, to continue implementation of the Computer Science Act
- Alabama Math Science and Technology Initiative (AMSTI): Increase of $3 million to expand services, add new regional services, and cover cost of living adjustments
- Alabama Numeracy Act: An additional $5 million, bringing the total request to $20 million, to continue the implementation of the Act.
- Alabama Reading Initiative: Increase of $8 million, bringing the total request to $102 million, as well as $3 million specifically to address students struggling with reading in grades 4 and above
- Student Assessment: Increase of $5.7 million to fund implementation of the ACAP as well as ACT Work Keys exam for high school students
- Office of School Improvement: $950,000 to add staff and fund the Transformation Academy
- Special Education Teacher Incentive Program: $68 million to provide a $5,000 stipend for special education teachers
Update on COVID Relief Funds: Alabama schools have received over $3 billion in COVID relief funding from the federal government. These funds are set to run out in September of 2024. Dr. Mackey updated the committee members on how much of this money has been spent, and also cautioned that in 2025 the state would be responsible for certain programs that are currently being at least partially funded by federal funds, such as summer reading and math programs.
Supplemental Budget: For the Supplemental Budget, which appropriates unused funding for the current fiscal year, Dr. Mackey made the following requests:
- $24 million to fund Summer Math Camps and other Alabama Numeracy Act implementation
- $500 million for school construction, which has increased in cost
- $25 million for College and Career Readiness grants to help increase the number of Alabama high school graduates that are prepared for life after high school
Marcus Morgan, Director of the Alabama Commission on the Evaluation of Services
Marcus Morgan discussed a variety of topics related to their research. The presentation included a brief overview of their work on the Alabama teacher workforce, recruitment, and retention. See the commission’s reports on Alabama’s teacher pipeline linked here. Mr. Morgan emphasized that programs and initiatives need to do a better job of defining success and determining how success will be measured, saying “if it can’t be measured, it can’t be improved.”
Dr. Barbara Cooper, Secretary of DECE
Dr. Cooper spoke about the effectiveness of her department’s programs, especially First Class Pre-K. In her presentation, Dr. Cooper highlighted how First Class Pre-K data shows that students who complete the program before entering kindergarten are more prepared than their peers. The Department of Early Childhood Education requested a total of $216 million, a $30 million increase over FY2023. Most of this ($27 million) will be for the Office of School Readiness to increase the number of First Class Pre-K classrooms across the state and additional summer and afterschool learning. See DECE’s budget handout here.
The Governor will release her proposed budget for the Education Trust Fund in the next few weeks. State Finance Director Bill Poole and Legislative Fiscal Agency Director Kirk Fulford will present to the committees on March 7th, at 9:30 am on the state’s financial status. You can watch the live stream of their presentations here (select Room 200).