Budget Watch: Tracking the 2025 Education Trust Fund Budget

Updated

Tuesday, February 13, 2024

Governor Ivey’s Recommended FY2025 ETF Budget

Last week, the Governor’s proposed budgets were released. As always, the budget package includes multiple bills: the FY2025 Education Trust Fund (ETF) budget (HB145), the supplemental appropriation (HB144), the Advancement & Technology fund (HB147), a pay raise for public education employees (HB146), and funding for certain higher education institutions. Here’s what’s included:

The FY2025 Education Trust Fund 

Governor Ivey’s proposed record-breaking Education Trust Fund (ETF) budget totals $9.348 billion, a 6.25% increase over last year and the maximum amount that can be spent by law. That includes $6.3 billion for K-12 schools and programs.

Alabama Public Charter School Commission:

  • $1.5 million for the Commission, increased from $400,000 in FY2024 and moved to its own line item.

Local Boards:

  • $4.67 billion for the Foundation Program, a 3.69% increase over FY24. 
    • $19.2 million of this would be for a starting salary increase. This would bring Alabama’s starting teacher salary to $47,600, the highest in the southeast. Both teachers and education support personnel at K-12 schools would receive a 2% pay raise. 
  • $21.2 for the At-Risk program, which provides funding to school districts based on the number of students in poverty and the number of students not proficient on ACAP exams. This comes out to less than $50 per student. (This is separate from the At Risk funding allocated to the ALSDE.)
  • $80 million for the TEAMS program, level funded from FY24, which was the ALSDE request. 
  • $16.3 million for Special Education teacher stipends, providing a $1,200 stipend to each special education classroom teacher. This is $11.6 million higher than the FY24 allocation, but less than the $34 million ALSDE request.
  • $2 million for Current Units to be used for the start-up or conversion of charter schools.

Alabama State Department of Education:

  • $142.8 million for the Alabama Reading Initiative (ARI), a $48 million increase over FY24. 
    • $36.8 million is earmarked for Reading Coaches, level funded from FY24. The department requested $61.6 million for this specific expense. 
  • $68 million for implementing the Alabama Numeracy Act through the ALSDE Office of Math Improvement. This was higher than the FY24 allocation of $40 million and the department’s request of $63.8 million.
  • $30.9 million to continue implementation of the 2023 Principal Leadership and Mentoring Act. This matches the request from the ALSDE for the program, of which: 
    • $3.5 million will be for the ALSDE to run the program
    • $16.5 million will be for principal stipends
    • $8.5 million will be for assistant principal stipends
    • $2.3 million will be for additional stipends for both principals and assistant principals in hard-to-staff schools
  • $17.5 million for English Language Learners, a $1.3 million increase from FY24. 
    • This includes a $2 million earmark for regional English Language specialists, level funded from F24. 
  • $0 recommended for struggling readers beyond grade 3. This line item received no funding in FY24. The Board had a significant discussion about this request and how they could support older students struggling to read. The department’s request was $22 million. 
  •  $13.5 million for Advanced Placement, a 2 million dollar increase over FY24
  • $6 million for Computer Science, level funded from FY24, which was the ALSDE request.
  • $2.8 million for the Alabama Summer and Afterschool Program, which is level funded from FY2024 
  • $19.4 million for Student Assessment, level funded from FY24. This is less than the $23.3 million requested by the ALSDE. 
  • $1.85 million for the Office of School Improvement, an increase from FY24’s $950,000. 
  • $11 million for Turnaround Schools, an increase of $1 million over FY24. 
  • $0 for the College and Career Readiness Grants line item. Funding was allocated for this in the supplemental budget instead (see below). FY24 appropriation was $15 million, and the request for FY25 was $20 million.
  • $2.6 million for a new Data Literacy line item to be spent in collaboration with Innovate Alabama 
  • $2.75 million for Early Childhood Classroom Assessment. 
  • $11.2 million for school safety, security, and climate. 
    • $4.7 million of this would be for Mental Health Service Coordinators, level funded from FY24. This is less than the department’s request of $9.2 million for this line item.

Department of Human Resources:

  • $71.2 million for the Child Care and After School Program, an increase of $8 million over FY24. The department’s request for this program was $83 million. 

Department of Early Childhood Education:

  • $185 million for the Office of School Readiness, a $3.9 million increase over FY24. This is less than the requested $188 million.

Supplemental Budget:

The supplemental budget totals $651 million, of which almost $400 million is for K-12 schools and programs. Here’s the breakdown:

Local Boards of Education:

  • $50 million for new school busses
  • $28.8 million for core subject textbooks
  • $8.1 million for the Foundation Program
  • $2 million for the opening of new charter schools through current units

State Department of Education:

  • $15 million for summer reading camps
  • $100 million for school safety grants (Gov. Ivey stated this as a priority in her State of the State address – read our recap here)
  • $35 million to replace student tablets or computers through a matching grant program
  • $17 million for College and Career Readiness grants
  • $50 million for Education Savings Accounts through the CHOOSE Act (HB129/SB61)
    • There is an additional $1 million for the Department of Revenue to administer the CHOOSE Act program

Other Funding:

  • $30 million for the Alabama School of Healthcare Sciences in Demopolis, another priority of Gov. Ivey’s from her State of the State address
  • $2.5 million for Ed Farm
  • $2,450,000 for the Talent Triad, a new initiative helping to connect job seekers with industry through the use of Learning & Employment Records (LERs). This work has been led by Governor Ivey’s Office of Education and Workforce Transformation.

Advancement & Technology Fund:

The Advancement & Technology fund is funded from supplemental appropriations, which could be up to $1 billion each year. Currently, its balance is $1.75 billion, and Gov. Ivey’s recommendation is to appropriate $700 million of that, with $508.4 million going to K-12 schools distributed by a formula based on average daily membership (ADM). Schools could use this money for one-time expenses, like upgrading their technology or facilities. Click here to see the bill, which has a list of how much each school system would receive.

 

Tuesday, February 6, 2024

On Tuesday, February 6, state agencies presented to the budget committees on the FY2025 budget.

Dr. Eric Mackey, Superintendent of Education – ALSDE Budget Request 

State Superintendent Dr. Mackey presented the ALSDE’s budget request for FY2025 and shared some updates on the department’s work.

  • Advanced Placement: $13.5 million for AP, an increase of $2 million over FY24.
  • Alabama Numeracy Act: $63.8 million, a $23.8 million increase.
  • Alabama Reading Initiative: A total of $158 million, including $61.6 million for K-3 reading coaches and $2.75 million for early childhood classroom assessment.
  • Struggling Readers Beyond Grade 3: $22 million for a line item that received no funding in FY24, despite a $3 million request.
  • Computer Science: Level funded at $6 million. 
  • Mental Health Service Coordinators: $9.2 million, an increase of $4.5 million. 
  • Student Assessment: $23.4 million, an increase of $4 million.
  • Principal Leadership & Mentoring Act: A total of $30.8 million, including $16.5 million for principal stipends, $8.4 million for assistant principal stipends, and $2.3 million for additional stipends for those working in hard-to-staff schools.

The State Board of Education voted to send this request to the Governor at their October meeting. To see the full budget request spreadsheet from the ALSDE, click here.

State Budget Projections 

Kirk Fulford of the Legislative Fiscal Office (LFO) presented on the tax revenues that go into the Education Trust Fund budget. Due to federal funding during the pandemic, state tax revenue has been unusually high for the past several years. 

  • In FY2021, revenue was $8.6 billion
  • In FY2022, revenue was $10.4 billion
  • In FY2023, revenue was $10.4 billion

FY23 ended in September 2023. With another year of strong revenues, more tax revenue came in than the Legislature appropriated, leaving a balance of $2.5 billion. In years past, some of this money would have been available for a supplemental bill. However, most of that money is required to be allocated to specific funds and savings accounts, including the following:

  • Budget Stabilization Fund:A savings account created by the Rolling Reserve Act that the legislature can draw from if proration is declared: $111 million. 
  • Educational Opportunities Reserve Fund: A new savings account established last year that the Legislature can use to bolster spending if revenue drops, but does not require proration: $412 million. 
  • Advancement & Technology Fund: A savings account with a formula-based distribution to local school districts and colleges for one-time projects such as equipment, technology, instructional support, maintenance, etc.: $1 billion. 
  • Reversions Available for Reappropriation (unspent funding from state education agencies that will be reappropriated to them): $343 million

That leaves, at most, $651 million that legislators can appropriate in a supplemental budget this year. This is significantly lower than the $2.8 billion the legislature appropriated in last year’s supplemental budget, and will likely continue to decrease in the coming years.

For the FY2025 budget, Legislative Fiscal Office (LFO) estimates that tax revenue will be $10.6 million. Due to the caps that limit how much the legislature can appropriate each year, the maximum for FY2025 budget is $9.3 billion. This is a $549 million (6.25%) increase over the FY2024 appropriation.

State Finance Director Bill Poole presented general information about the Governor’s budget proposal, which totals $9.3 billion, the full amount that the legislature is allowed by law to spend. The Governor’s full budget recommendation will be released in the next few days. Check back soon for a breakdown of what is included.