Senate passes $8.8B education budget with $100 rebate

The Alabama Senate approved an $8.8 billion education trust fund budget Thursday. The spending plan includes a 2% pay raise for education employees, a $2.8 billion surplus, and gives the go-ahead for a one-time, $100 direct rebate to taxpayers.

“The passage of this record budget and its additional supporting legislation was a culmination of bipartisan effort and work that began nearly six months ago,” Senate President Pro Tem Greg Reed said.

A $500 million allocation to the Educational Opportunities Reserve Fund was compared to a “rainy day” savings account by Senate Finance and Taxation Committee Chairman Arthur Orr, in that it can only be accessed during economic downturns.

“With the excess we have now, we must be strategic to prepare for a future time when that may not be the case,” Orr said.

Highlights of the 2024 education budget and supplemental budget:

$5.9 billion to K-12
$2.4 billion to 2- and 4-year higher education
$195 million to early childhood education
2% pay raise for education employees
$76 million for the Department of Mental Health
$35.6 million increase to the Alabama Community College System
$20 million for teachers’ classroom instructional materials
$10 million for “underperforming schools”
Alabama Math, Science and Technology Initiative increased by $25 million
$500,000 to special education classroom cameras
$100 direct tax rebates to 2021 tax filers

The 2% pay raise for education employees will go into effect when the fiscal year begins in October.

“Alabama is making record investments that will benefit all Alabamians for many years ahead, and that is something to be proud of,” Gov. Ivey said. “This is, in part, because of wise budgeting in recent years, and we are continuing that by paying down debt and increasing our reserves.”

The K-12 Capital Grant Program was created under the Office of the Lieutenant Governor to offer grants to local schools, aiding them with capital projects, deferred maintenance, and technology.

Orr increased the amount for school safety grants to $40 million in committee Wednesday.

“School safety has been something you all have told me about so we have quadrupled the original recommendation for school safety grants,” he said.

Gov. Kay Ivey’s proposals varied from what was passed by the Senate. Most notably, the $400 rebate was reduced to $100 in committee, which some lawmakers questioned if that amount was meaningful.

The suggested $400 rebate would come with a price tag of $1 billion, Orr said, whereas a $100 rebate costs $275 million. This amount is covered in the supplemental appropriation for 2023.

“I was straddling the fence already on rebates, even at the $400 level,” Senate Minority Leader Bobby Singleton said Thursday. “Now I really think my feet is on solid ground on no rebate just for $100.

“I think it’s an insult.”

“I’ll take your $100,” Orr joked.

Gov. Ivey said she was glad the legislature is using her proposal to deliberate about what will ultimately be best for all Alabamians.

“With a record, one-time surplus, I maintain that rebates, rather than more government spending, are a responsible way to provide needed relief to hard-working Alabama families,” Gov. Ivey said.

Grayson Everett is a staff writer for Yellowhammer News. You can follow him on Twitter @Grayson270 for coverage of the 2023 legislative session.