MONTGOMERY, Ala. – The 2027 General Fund budget is one step closer to the finish line after a House committee approved its own $3.74 billion version on Tuesday morning.
The House Ways and Means General Fund committee’s proposed budget is $12.6 million higher than the $3.72 billion spending bill passed by the Senate before the Legislature’s spring break.
The Senate’s version was a $37.1 million increase from what Gov. Kay Ivey sent to lawmakers two months ago.
Changes from the Senate version
Here are the major differences between the Senate’s version and the House’s proposal.
- $2 million increase for airport development
- $2 million increase for the District Attorneys Administrative Fund
- $1.84 million reduction from the Correctional Facilities Maintenance Fund
- $975,000 increase for the Historic Blakeley Authority under the Alabama Historical Commission
- $750,000 reduction in funding for the state’s Resource Conservation and Development Program
- $600,000 reduction for the Ultimate Angler World Champion Event
- $600,000 increase for the North Alabama Public Energy District
- $500,000 increase for the Wheeler Wildlife Refuge
- $500,000 increase for the procurement and maintenance of forest fire fighting vehicles and equipment
- $500,000 decrease for the Saunders Applied Research Institute under the Alabama Forestry Commission
- $500,000 increase for music and concert festival promotion under the Alabama Department of Economic and Community Affairs
- $500,000 increase for the Alabama Statewide Emergency Notification System with the Emergency Management Agency
What else is included in the House’s proposed budget?
The budget already includes $16 million for a 2% raise for state employees and fully funds the expected increase in their health insurance costs.
Lawmakers also had to find $10 million for the first payment due this fall for the Legislature’s new about $400 million State House.
Several state agencies are experiencing slight funding increases in 2027, although some will see small decreases, including the Alabama Department of Mental Health, which will receive approximately $4 million less next year. The House version includes $325,000 more for the Department of Mental Health than the Senate’s version.
Alabama Daily News previously reported the budget also includes conditional appropriations for several agencies, assigning the departments of corrections, human resources and mental health tasks before they receive all of their 2027 funding.
The House committee made only one change to the supplemental budget, allocating $32,000 for the Genetic Counseling Fund.
The General Fund’s supplemental budget also includes $387.5 million for the Public Road and Bridge Fund and $200 million for the Rebuild Alabama Fund, both part of the Alabama Department of Transportation. It also increases funds for highway project bond repayment by $59.8 million for a total of $193.5 million. House General Fund committee Chairman Rep. Rex Reynolds, R-Hazel Green, said the money would help pay for the West Alabama Corridor.
Looking ahead
The committee approved the budget with minimal discussion on Tuesday.
Reynolds said he is meeting with both caucuses on Wednesday morning to discuss the budget. He said he expects the budget to be on the floor later on Wednesday afternoon.
Reynolds said he hopes that the Senate will concur with the changes the House makes instead of having to go into conference.
Reynolds touted that the proposed budget is fiscally conservative, with less than 1% growth from last year’s budget.
“We’ve been very consistent with our messaging that we need to have a conservative budget this time and leave revenue on the table if you will to push to the ‘28 and ‘29 budget cycles,” Reynolds said.
State financial leaders have this session expressed concerns about revenue to support the General Fund budget going forward.
Finance Director Bill Poole previously estimated a 4.2% decline in revenue for FY27, which begins Oct. 1, 2026. The drop isn’t in core revenue streams, Poole said, but instead comes from a sharp decline in interest earned on the state’s deposits.
Interest was not historically a large part of the General Fund’s revenue, between $10 million and $60 million from 2016 to 2022. But since 2023 – when federal pandemic relief funds were distributed to states and sat waiting to be spent – interest earnings have brought in between $400 million and $560 million each year. The current year’s interest revenue is expected to be $374 million. The estimate for 2027 is $124 million, officials said.
The committee also passed a bill to appropriate $170,000 to the Alabama Coalition Against Domestic Violence during its Tuesday meeting.
There are five days remaining in this year’s session.