On Tuesday, the Alabama Senate agreed with the changes that the House of Representatives made to the state general fund budget last week. Governor Kay Ivey praised lawmakers after they passed the final legislation.
“Here in Alabama, we are continuing to budget wisely,” said Governor Ivey. “Even though the country’s economy is not doing well, our financial situation is good. We can spend money where it matters, on things that will benefit future generations.”
Ivey said she will approve the budget and make it a law.
“We are increasing funding in important services like public safety and mental health care, while also being responsible with taxpayer dollars and preparing our budgets for the future,” said Ivey.
The state legislature has been preparing for an economic downturn since 2020 by saving money for the next budget year. Because there was no economic downturn, the state had a large surplus from 2023 that they carried over into 2024. This allowed the Legislature to add extra money to the budget for 2024. The fiscal year 2025 will start on October 1st.
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“Alabama’s general fund is currently stronger than ever due to historically large revenues, high interest rates, and our previous conservative budgets,” said Rep. Rex Reynolds (R-Huntsville), who chairs the House Ways and Means General Fund Committee.
“We are fortunate to have more than enough resources at the moment, but it’s crucial to understand that this exceptional growth cannot continue indefinitely. We must continue to be responsible with our budgeting practices that have brought us to this point.”
“The budget for this year’s General Fund and the additional money allocated show that my committee is dedicated to using taxpayer money responsibly. I am grateful that everyone voted unanimously to approve them today.”
The budget that was approved by the House is $3,410,393,112. This is an increase from the budget for the previous fiscal year, which was $3,013,400,381.
The supplemental appropriation moves money from different funds to various state agencies. Specifically, it allocates $2,243,062 from the Youth Services Reimbursement Fund to the Department of Youth Services, $300,000 from the Veterans’ Assistance Fund to the Department of Veterans’ Affairs, and $253,875,169 from the SGF to different state agencies.
“Managing a budget of several billion dollars and making sure that every state agency has enough funding is definitely one of the most challenging roles in state government. I am extremely proud of Chairman Reynolds and his committee for taking on this responsibility.” “Our smart investments today will make Alabama stronger in the future,” said Speaker of the House Nathaniel Ledbetter (R-Rainsville).
Both bills were supported by Senator Greg Albritton, a Republican from Atmore, who is the chair of the Senate Finance and Taxation General Fund Committee.
The State of Alabama has a budgeting system where more than 84% of the money is set aside for a specific fund. The state has two main funds, the SGF and the education trust fund (ETF). The Alabama Department of Transportation receives its funding from fuel taxes that are separate from the two budgets.
The ETF funds various educational institutions, including K-12 schools, two-year colleges, four-year colleges, early childhood education, universities, and education-related agencies like archives and history. The ETF is funded by taxes on personal and corporate income.
The Alabama Departments of Corrections, Medicaid, Commerce, Public Health, Mental Health, the Alabama Law Enforcement Agency, as well as courts and district attorneys are some of the agencies that receive funding from the general fund.
The General Fund is supported by various sources of revenue, including taxes on online purchases, insurance taxes, utility taxes, a portion of the property tax, and interest income from the money held in trust in the Alabama Trust Fund.
“I am excited to sign this budget into law,” Ivey said.
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