The Alabama Senate unanimously passed a $3.72 billion General Fund budget for fiscal year 2027 on Wednesday, a modest increase over the current year that includes conditional funding tied to performance benchmarks at three state agencies.
SB146, sponsored by Chairman of the Senate Finance and Taxation General Fund Committee, State Sen. Greg Albritton (R-Atmore), passed 32-2, and now moves to the House.
The budget is approximately $37.1 million more than Governor Kay Ivey’s recommendation and includes a 2% pay raise for state employees along with an increased state share for employees’ health insurance.
The State Employees Insurance Board will receive a $150 increase per member per month, bringing the state’s contribution to $1,175. The pay raise is appropriated at $16 million and the health insurance increase at $18 million.
The budget withholds $40 million of the Department of Corrections’ $867.9 million allocation unless 90% of the new Elmore County facility is completed and utility infrastructure at the Escambia County facility is finished by October 1.
The first quarter of the Department of Human Resources’ $148.4 million allocation will be held unless the department lowers Alabama’s Supplemental Nutrition Assistance Program error rate to 6% by October 1, or develops a plan to offset potential federal funding cuts. Alabama’s error rate stood at 8.32% in fiscal year 2024.
“I remain confident,” Albritton said. “They just need to know that we’re serious about meeting that requirement.”
The final two quarterly installments of the Department of Mental Health’s $42 million for crisis care centers will not be released until the department reports program status to budget chairs, the Director of Finance, and the Legislative Fiscal Officer.
Albritton noted the budget also includes a $10 million first payment for the state’s move into the new statehouse expected this fall.
“We had to struggle around and stretch around to find the $10 million first payment,” Albritton said.
Thursday was the 22nd legislative day. There are eight days remaining in the 2026 legislative session.
Sawyer Knowles is a capitol reporter for Yellowhammer News. You may contact him at [email protected].
