Alabama State Finance Director Bill Poole spoke to some major opportunities for lawmakers as the 2025 legislative session gets underway.

After Governor Ivey’s State of the State address on Tuesday night, Poole reported that Alabama’s financial outlook remains stable and positive as lawmakers consider post-pandemic economic adjustments.

According to Poole the state is transitioning from the fiscal anomalies brought on by COVID-19, with revenue streams stabilizing and returning to pre-pandemic growth patterns, including the Education Trust Fund.

“We anticipated that we had planned for that,” Poole told Yellowhammer News. “Also in the general fund, you’re seeing revenues start to tick back down.”

We generate a lot of revenue based on interest, on state deposits, which has been a unique kind of anomaly of holding some COVID cash. At the same time that interest rates have been high, we know that’s going to return normal. So I think we’re very stable, very positive, but we’re also going to return to a more normalized revenue cycle, as we’ve anticipated and used to.”

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Now engaged in discussions to reform Alabama’s education funding formula, state lawmakers are considering significant changes to the decades-old foundation program.

“So those conversations are ongoing. I think they’re very healthy and positive conversations changing the foundation program is not an easy task. A lot of statutes have bolted onto that through the decades,” Poole said.

“I think there’s a couple approaches that you’ve heard, particularly Chairman Garrett and Chairman Orr talk about them, you go for a full revamp, or you can move into more of a hybrid position, can target the needs and fund them separately and distinctly. So I think that’s the position we’re in right now as it relates to the governor’s budget. But we also know these discussions are ongoing. We want to continue to be engaged in those any conversations about spending education dollars more efficiently.”

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Alabama lawmakers are also reevaluating the state’s overtime tax cut, initially passed in 2023 and set to expire in June 2025 after significant discrepancies between projected and actual revenue impacts. Poole said there are some broad options to consider.

“I think everything should be on the table. The goal should be to vote, obviously, what is the best methodology to fund education now and long term, what is the best for the taxpayers of the state of Alabama,” Poole said.