The Alabama State House is on track and slightly under budget for a fall 2026 opening, lawmakers were told Tuesday.
Othni Lathram, secretary of the Legislative Council, updated General Fund committee members about the progress and plans to pay for the $400 million project.
That cost includes the $325 million State House going up directly behind the current building in Montgomery, a separate $35 million parking deck and $40 million to furnish and equip the building with necessary technology.
Work on the new State House is now 100% bid, Lathram said.
“We expect to complete that building several million under that $325 million mark,” he said.
Both the new building and garage are being built by the Retirement Systems of Alabama. So far, bids on the parking garage are slightly below budget, Lathram said.
“We should hit just shy of that $400 million mark,” he said.
The agreement between the council and RSA says the retirement system will get an 8% return on its investment while the state leases the building and eventually owns it.
Lathram also discussed the goal of having $255 million cash on hand to pay for the project up front, noting it would be unwise to finance $400 million, especially when some of the items, like IT components, won’t last 25 years.
To date, lawmakers have set aside $155 million, $92.5 million from General Fund spending and $62.5 million from the Education Trust Fund spending.
“By fronting that money, we’ve avoided having to capitalize any of the interest over the construction period,” Lathram said.
He said the hope is to get an additional $75 million set aside by lawmakers in the legislative session that starts in January.
“That will leave us about $170 million to finance over the course of that 25-year period,” he said.
How that possible $75 million is split between the General Fund and ETF is to be determined. House General Fund committee chairman Rep. Rex Reynolds said more should come from the ETF, based on previous contributions.
Later Tuesday, the General Fund committee members heard about expected revenue decreases in 2027 and beyond and the need for fiscal belt tightening.
Meanwhile, a new line item will be needed in the fiscal 2026 General Fund for operating expenses in the new building. And there will be months of overlapping expenses when both buildings are standing before the current site is demolished to make way for green space.
Lawmakers moved into the current building, the Alabama Department of Transportation headquarters, in 1985 for what was supposed to be a short period while the Capitol underwent renovations. Four decades later, they’re still there and the list of issues with the building is lengthy and expensive.
There are accessibility issues for those with disabilities and many of the committee rooms only hold a few dozen people. It’s common to see members of the public turned away from meetings.
The new building has 11 committee rooms. Three will hold at least as many people, about 220, as the current building’s largest room. Two other rooms will hold well over 100 people, Lathram said.
“(The new rooms) should forever end our need to turn away members of the public,” he said.
The new building will also have four caucus meeting rooms and a large multipurpose room for events.
One thing that the new State House won’t have that the old one did? An underground tunnel under Union Street to connect it and the Capitol.
“That would have blown the budget,” Lathram said.
See the full presentation here: State-House-Budget-Presentation-OL