The Alabama House of Representatives passed the 2027 General Fund Budget on Wednesday, sending the $3.74 billion spending plan back to the Senate for concurrence or a conference committee.

The budget, carried in the Senate by State Sen. Greg Albritton (R-Atmore) as SB146, represents a $12.6 million increase over the Senate-passed version and passed the House 104-0. The bill is a 1 percent increase over the current fiscal year 2026 budget.

Key provisions include a 2 percent cost-of-living adjustment for state employees, a $2.5 million increase for the Alabama Department of Commerce including $2 million for Innovation Depot, and a $19.25 million shift of Children’s Health Insurance Program cost growth to the Education Trust Fund.

The budget also conditionally appropriates $15 million each to the State General Fund Budget Reserve Fund and the Medicaid Reserve Fund, subject to availability at the end of fiscal year 2026.

House Speaker Nathaniel Ledbetter (R-Rainsville) called the budget a continuation of responsible conservative governance.

“The 2027 General Fund Budget represents the 17th consecutive year that House Republicans have funded government responsibly,” Ledbetter said. “I commend Chairman Reynolds and our members for working to place Alabama on a firm financial footing.”

State Rep. Rex Reynolds (R-Huntsville), who chairs the House Ways and Means General Fund Committee, said the budget was shaped by fiscal headwinds.

“Even with costs growing across the board, this year’s budget is only growing by 1 percent compared to fiscal year 2026,” Reynolds said. “With interest rates dropping and COVID-era funding coming to an end, I expect the next several budgets to present even greater challenges.”

Wednesday was day 25 of the legislative session. There are five legislative days remaining.

Sawyer Knowles is a capitol reporter for Yellowhammer News. You may contact him at [email protected].