House passes largest education budget in history of Alabama

April 24, 2025 – MONTGOMERY, AL - The Alabama House of Representatives passed a $9.9 billion education trust fund (ETF) budget. The package of bills include two supplemental appropriations bills and three bills funding private schools which raises the total cost of the package to $12.1 billion.

$180 million of that will fund the CHOOSE Act allowing parents unprecedented freedoms to pick the best school for their child and have the education dollars follow the child. 36,000 parents across the state have already applied for those funds seeking a more rigorous academic regimen than that found in their neighborhood public school and/or schools that share their family's faith and values without liberal indoctrination in socialism, the LGBTQ+ agenda, and DEI concepts.

Senate Bill 112 (SB 112) is sponsored by state Senator Arthur Orr (R-Decatur). Orr chairs the powerful Senate Finance and Taxation Committee. They, along with their peers in the House of Representatives – the House Ways and Means Education Committee – are tasked with preparing the education budget. SB112 was carried in the House by Representative Danny Garrett (R-Trussville) who chairs the House Committee.

The House also passed a bill – the RAISE Act – that changes how the state funds K-12 public schools. Schools will get their normal per student funding that they get now; but they also will receive an additional payment for each of the special needs, English language learner, impoverished, and gifted child they have. Having to provide special education, English language learning, and gifted resources cost schools money. Middle and upper class students families are expected to provide pens, pencils, paper, scissors, glue, crayons, erasers, and much more as part of the deal. For teachers in poverty areas, it is rare for students to bring any of that and for students to participate (and the classroom to function) those materials are often purchased by the teacher out of the pupil supply dollars.

The RAISE Act – for the first time – acknowledges these realities. It is funded initially by $375 million from the Education Opportunities Reserve Fund. That initial funding is enough to fund the RAISE Act fund for the first three years of the program out of the supplemental appropriation funds.

"For the first time ever, we are funding schools based off the needs of the specific students they serve instead of taking a one-size-fits-all approach and funding on headcount alone," said Chairman Garrett.

Alabama has two rolling reserve accounts which are intended to fund the ETF if the economy fails to generate the expected tax revenues. This problem was endemic in the state to 2012. Legislators would guess how much tax dollars would come in and then appropriate every single one of those dollars towards the ETF. If they missed the projection the state would have to order a proration. Meaning that schools would get less money than they had been budgeted to get – and generally those cuts all came in the third and or fourth quarters of the year – meaning that an innocuous three and a half percent proration could actually meant that the school received a 14 percent cut in the fourth quarter forcing school boards to non-renew teachers, shutdown summer school, postpone summer renovations, and raise thermostats in August and September. The Rolling Reserve Act combined with more fiscally prudent economic forecasting means that the ETF has not had a proration in over a dozen years. This also means that once the rolling reserve accounts are fully funded the surplus dollars that were not used are available for supplemental appropriations to the schools for a variety of needs. Instead of the schools getting their funds cut in the third and fourth quarters (as was almost the norm for the state for decades) the state's colleges, universities, junior colleges, and K-12 schools actually get extra funding in the fourth quarter. This year is no exception.

The 2025 fiscal year education budget is the biggest in the history of the state and all those schools and education agencies will get additional dollars through the supplemental appropriations bills in this current budget year.

SB111 and SB113 are the two supplemental appropriations bills. They total approximately $2 billion.

Also in the budget package are three bills funding Southern Preparatory Academy (formerly known as Lyman Ward) – SB 122, Talladega College (a HBCU) – SB150, and Tuskegee Institute (a HBCU and land grant institution) – SB109. Those bills are separate from the education budget (SB112) because they are private schools thus can't technically be in a public education bill.

A HBCU is a historically Black College or University.

All the bills in the $12.1 billion education budget package passed the House – albeit with some minor changes from the earlier versions that passed the Senate. The Alabama Senate can either vote to concur with the House changes or they can vote to send the budget to a conference committee to hash out a compromise.

Alabama has an arcane budgeting system where most of the money is earmarked, agencies may or may not have their own sources of dollars that go direct to the agency that are not part of the budgets, and the state had two (not one) budgets. The other is the state general fund agency (SGF). It funds non-education spending. The SGF has passed in it's House of origin – the House of Representatives and has been approved by the Senate Finance and Taxation General Fund Committee in the second house so could be passed as early as this week.