Education, General Fund Budgets Near Final Passage

Education, General Fund Budgets Near Final Passage

Both the House and Senate have passed their versions of the state’s two budgets, leaving just three days for final negotiations before the legislative session ends. Here’s a breakdown of the key points:

• Record Education Funding: The Senate approved a record $9.3 billion for the Education Trust Fund (ETF) for the 2025 fiscal year, a significant increase of $550 million compared to 2024.
• Teacher Pay Raise: This budget includes a 2% pay raise for all education employees.
• Focus on K-12: Over half of the ETF funding ($5.3 billion) will go to the “Foundation Program,” which directly supports local school boards for K-12 education.
• Higher Education Increase: Alabama’s universities and colleges will see a 7.2% funding increase to $1.66 billion.
• Community Colleges Funded: The Alabama Community College system is allocated approximately $587 million.
• Programs for Children: The budget includes $10 million for a summer feeding program for low-income children in 2025.
• New Initiatives: A $651 million supplemental fund will support local school boards, summer reading camps, State Department of Education programs, and $50 million as initial funding for the new school choice legislation (CHOOSE Act).
• Studying School Funding: The budget calls for a study to evaluate the state’s current school funding approach, which is based on student count, and explore alternative methods that consider factors like student needs, poverty, and academic achievement.

General Fund Allocations

The House and Senate disagreed on some General Fund spending. The House reinstated much of the funding cut by the Senate from the governor’s proposed budget. Here’s an overview:

• House Budget: The House approved a $3.3 billion General Fund budget with a $253 million supplemental funding bill for the current fiscal year (FY2024).
• Medicaid Funding Maintains Share:  Roughly half of the General Fund goes to the Alabama Medicaid Agency ($955 million).
• Corrections Funding: The Alabama Department of Corrections receives $736.5 million.
• Increased Mental Health Support: Mental health funding sees a significant rise of $24 million, reaching $238 million.

Next Steps

With the session nearing its end, a conference committee will now work to reconcile the differences between the House and Senate versions of ETF budget and the Senate will either concur with House changes or send the General Fund budget to a conference committee. Final approval on both budgets is expected this week.

Housing, Childcare ‘Working for Alabama’ Tax Credits Pending Final Passage

The Senate is poised to approve two tax credit bills to tackle Alabama’s low workforce participation rate. These bills are expected to be voted on next week.

• Workforce Housing Tax Credit (HB346): This bill aims to incentivize the development of affordable housing units, targeted in areas with high job demand. Private developers of these units could qualify for tax credits totaling up to $15 million annually.
• Childcare Tax Credit (HB358): This bill would offer tax breaks to large employers who invest in childcare solutions for their employees. Companies that build on-site childcare facilities or contribute towards off-site care costs could receive up to $600,000 per year in tax credits.

While Sen. Arthur Orr, chairman of the Senate education budget committee, has expressed concerns about the potential impact on the Education Trust Fund (ETF) budget, the committee rejected proposals to reduce the cap on both bills before advancing them to the Senate floor with bipartisan support.

Gaming, Lottery Proposal Stalls in Senate

After months of debate, a compromise bill on gambling expansion was presented to the Alabama House and Senate. The proposal would allow:

• Education Lottery: Lottery proceeds could be used for two- and four-year last dollar scholarships, dual enrollment costs, and teacher and retired teacher bonuses.
• Limited Electronic Games: Seven casinos and the Poarch Creek Indians’ casinos could offer electronic versions of table games like poker and roulette, instead of traditional dealer-run tables. Revenue from these facilities would be targeted to General Fund-related expenses such as mental health, rural healthcare, and road and bridge infrastructure.

House Approves, Senate Falls One Vote Short

The House quickly passed the compromise bill. However, in the Senate, the legislation fell one vote short of the required 21 votes for passage of a constitutional amendment.

Future Uncertain

The governor and supporters are lobbying for the additional vote needed. However, it remains unclear whether the bill can be revived for a successful Senate vote and ultimately reach Alabama voters for their decision.

Ethics Reform May Get Second Wind in Senate

Rep. Matt Simpson’s ethics reform bill, HB227, is back on track after languishing in the Alabama Senate for nearly a month following its passage in the House with bipartisan support.

Sen. Sam Givhan will handle the bill in the Senate, where it is expected to be in committee tomorrow.

Here’s what to watch:

• Time Crunch: Given the late stage of the legislative session, the bill faces a tight deadline. It needs to clear the committee, pass the full Senate, and then return to the House for approval of any changes made by the Senate.
• Senate Edits Would Require Additional House Vote: If the Senate modifies the bill, it would require another vote in the House to accept the Senate’s version.

Demopolis to Get Specialized Healthcare High School

The Alabama Legislature granted final approval to HB163, paving the way for a unique public high school in Demopolis. This specialized school will focus on educating the next generation of healthcare professionals.

• Focus on Healthcare Careers:  The curriculum will be designed to prepare students for careers in various healthcare fields.
• 2026 Opening: Construction of the school is expected to begin soon, with an opening date targeted for fall 2026.
• Funding Secured: Funding will come from a combination of sources:
• • $20 million from the state
  • Support from Bloomberg Philanthropies (specific amount not mentioned)

This approval marks a significant step towards establishing a valuable resource for students interested in healthcare and for addressing Alabama’s need for qualified healthcare professionals.

The Legislature completed its 27th day on Thursday. Lawmakers will return tomorrow for day 28 out of a maximum of 30 legislative days. The Legislature is expected to adjourn sine die which concludes the 2024 Regular Session this week.

The following bills are being tracked by our governmental relations team.

Bill	Sponsors	Title	Last Action	Latest Version
AL 2024rs HB 227	Matt Simpson	Ethics; laws pertaining to public officials and public employees revised (Judiciary (Senate))	Senate • May 02, 2024: Pending Committee Action in Second House (Judiciary)	Engrossed
AL 2024rs HB 358	Anthony Daniels	Relating to child care and workforce development; to establish the employer tax credit and child care provider tax credit; to make legislative findings. Senate Calendar: Regular Calendar (May 07, 2024) Position: 136	Senate • May 02, 2024: Read for the Second Time and placed on the Calendar (Finance and Taxation Education)	Engrossed
AL 2024rs HB 346	Cynthia Almond	Establishes the Alabama Workforce Housing Tax Credit Act; creates the Alabama Workforce Housing Tax Credit Senate Calendar: Regular Calendar (May 07, 2024) Position: 135	Senate • May 02, 2024: Read for the Second Time and placed on the Calendar (Finance and Taxation Education)	Engrossed
AL 2024rs SB 252	Greg J. Reed	Alabama Growth Alliance Bill Companion bills: HB 372	Senate • Apr 30, 2024: Read for the Second Time and placed on the Calendar (Conference Committee on SB252)	Engrossed
AL 2024rs SB 281	Tim Melson	Financial Institutions; to prohibit financial institutions from using a merchant category code to identify firearms transactions; to prohibit disclosure of financial information regarding firearms transactions	House • Apr 30, 2024: Signature Requested	Enrolled
AL 2024rs SB 247	Steve Livingston	Alabama Workforce Transformation Act FY24 Regular Session SENATE	Senate • Apr 25, 2024: Enacted	Act Number 2024-115
AL 2024rs HB 389	Shane Stringer	Financial Institutions; to prohibit financial institutions from using a merchant category code to identify firearms transactions; to prohibit disclosure of financial information regarding firearms transactions House Calendar: Regular Calendar (May 02, 2024) Position: 103	House • Apr 25, 2024: Read for the Second Time and placed on the Calendar (Financial Services)	Introduced
AL 2024rs SB 253	Donnie Chesteen	Alabama Workforce Pathways Act, different pathways for high school diplomas based on future career plans Companion bills: HB 373	House • Apr 23, 2024: Signature Requested	Enrolled
AL 2024rs HB 373	Kelvin Lawrence	Alabama Workforce Pathways Act, different pathways for high school diplomas based on future career plans Companion bills: SB 253 House Calendar: Regular Calendar (May 02, 2024) Position: 47	House • Apr 11, 2024: Read for the Second Time and placed on the Calendar (Education Policy)	Introduced
AL 2024rs SB 243	Dan Roberts	Economic development; state law authorizing counties and municipalities to provide for innovation districts as public corporations authorized; innovation district use of public funds for public or private persons authorized; Constitutional Amendment Senate Calendar: Regular Calendar (May 07, 2024) Position: 36	Senate • Apr 09, 2024: Carried Over	Introduced
AL 2024rs SB 242	Bobby D. Singleton	Innovation Districts; establishment of by counties and municipalities as public corporation authorized; provide for the powers of innovation districts Senate Calendar: Regular Calendar (May 07, 2024) Position: 35	Senate • Apr 09, 2024: Carried Over	Introduced
AL 2024rs HB 349	James Lomax	Innovation Districts; establishment of by counties and municipalities as public corporation authorized; provide for the powers of innovation districts. House Calendar: Regular Calendar (May 02, 2024) Position: 31	House • Apr 04, 2024: Read for the Second Time and placed on the Calendar (Economic Development and Tourism)	Introduced
AL 2024rs HB 372	Randall Shedd	Alabama Growth Alliance Bill Companion bills: SB 252 House Calendar: Regular Calendar (May 02, 2024) Position: 24	House • Apr 04, 2024: Read for the Second Time and placed on the Calendar (Economic Development and Tourism)	Introduced
AL 2024rs HB 368	Neil Rafferty	Economic development; state law authorizing counties and municipalities to provide for innovation districts as public corporations authorized; innovation district use of public funds for public or private persons authorized; constitutional amendment House Calendar: Regular Calendar (May 02, 2024) Position: 30	House • Apr 04, 2024: Read for the Second Time and placed on the Calendar (Economic Development and Tourism)	Introduced
AL 2024rs HB 344	Danny Garrett	Alabama Workforce Transformation Act FY24 Regular Session House Calendar: Regular Calendar (May 02, 2024) Position: 25	House • Apr 04, 2024: Read for the Second Time and placed on the Calendar (Economic Development and Tourism)	Introduced
AL 2024rs HB 366	Chris Sells	Consumer protection, further provides for data breaches (Judiciary (House))	House • Mar 21, 2024: Pending Committee Action in House of Origin (Judiciary)	Introduced
AL 2024rs SB 250	Chris Elliott	Establishes the Alabama Workforce Housing Tax Credit Act; creates the Alabama Workforce Housing Tax Credit (Finance and Taxation Education (Senate))	Senate • Mar 21, 2024: Pending Committee Action in House of Origin (Finance and Taxation Education)	Introduced
AL 2024rs SB 187	Merika Coleman	Digital assets, regulates digital asset operations (Banking and Insurance (Senate)) Companion bills: HB 214	Senate • Feb 29, 2024: Pending Committee Action in House of Origin (Banking and Insurance)	Introduced
AL 2024rs SB 151	Arthur Orr	State Investments and Public Contracts; to prohibit State Treasurer and Board of Control of RSA and TRSA from using ESG factors in investment decisions; may consider pecuniary factors; to prohibit state entities from considering ESG factors when awarding public contracts Senate Calendar: Regular Calendar (May 07, 2024) Position: 8	Senate • Feb 28, 2024: Read for the Second Time and placed on the Calendar (Finance and Taxation Education)	Introduced
AL 2024rs HB 242	Ben Harrison	Anti-discrimination against military. (Judiciary (House))	House • Feb 27, 2024: Pending Committee Action in House of Origin (Judiciary)	Introduced
AL 2024rs HB 214	Mike Shaw	Digital assets, regulates digital asset operations (State Government (House)) Companion bills: SB 187	House • Feb 21, 2024: Pending Committee Action in House of Origin (State Government)	Introduced
AL 2024rs HB 205	Prince Chestnut	Retail establishments; banning cash as payment source prohibited, exceptions provided (Commerce and Small Business (House))	House • Feb 20, 2024: Pending Committee Action in House of Origin (Commerce and Small Business)	Introduced
AL 2024rs HB 61	Chip Brown	Public contracts; ESG criteria prohibited in public contract. (State Government (House))	House • Feb 06, 2024: Pending Committee Action in House of Origin (State Government)	Introduced