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Senate approves $8.8B education budget, $2.8B surplus spending plan

MONTGOMERY, Ala. – The Alabama Senate on Thursday approved a record $8.8 billion state education spending plan for fiscal 2024 and an unprecedented $2.8 billion supplemental spending bill for this fiscal year.

Both proposals were amended from the recommendations Gov. Kay Ivey sent to lawmakers in March. 

Sen. Arthur Orr, R-Decatur, the chairman of the Senate education budget committee, said repeatedly this week that work on these budget bills has been the most challenging of his more than three terms as a budget chairman.

Some of the most significant changes made by the Senate were in the supplemental plan for spending the record revenue in the Education Trust Fund in the last year. Those changes include whittling Ivey’s proposed income tax rebates for Alabamians from $400 for individuals and $800 for couples to a little more than $100 per filer.  As lawmakers consider a variety of permanent tax cuts, they’ve hinted since March they’d likely scale back that rebate.

Senators also cut some non-education items from the plan, despite them being requests from local communities. That includes $200 million for a Main Street program, $31 million for an airport project in Mobile, $25 million for the Port of Mobile and $25 million for a water park complex in Montgomery near Maxwell Air Force Base. 

But some Montgomery area lawmakers said the River Region was now left out of the supplemental spending bill while other communities got funding for specific projects.

“I’m pleading to this body for some help,” said Sen. Kirk Hatcher, D-Montgomery.

Senators also removed funding for a proposed health care-focused magnet high school in Demopolis, replacing it with a feasibility study on the proposal instead. Sen. Bobby Singleton, D-Greensboro, on the Senate floor accused his colleagues of not wanting to support rural west Alabama.

Increases in spending in the supplemental include $40 million for school safety grants that schools can apply for.

There’s also $30 million for a new “Distressed Institutions of Higher Education Revolving Loan Program” administered by the State Treasurer. The bill could help any institution that meets its requirements, but it was specifically written for the struggling Birmingham Southern College. Legislation creating the loan program is moving with the budget bills and is sponsored by Sens. Jabo Waggoner, R-Vestavia Hills, and Rodger Smitherman, D-Birmingham.

A public and private college or university that has more than 50 years of operation and a “significant impact on the community in which it is located” could apply for a loan if it is “experiencing financial hardship which could lead to closure of the institution.”

The supplemental also now includes $200 million in projects at colleges and universities, $185 million to create a K-12 Capital Grant Program administered by the lieutenant governor and $500 million for a proposed Educational Opportunities Reserve Fund, an additional reserve fund to help the education budget weather any future economic storm.

Orr told reporters Thursday the new savings account was needed as previous record tax revenues into the Education Trust Fund begin to slow. He said so far this year, income tax receipts have declined compared to last year.

“We see a slowdown in the economy,” Orr said. “We believe we need a saving account to be able to continue the important programs that require additional funds each year like the Numeracy Act, the Literacy Act, the salary matrix for educators.” 

The Literacy and Numeracy acts focus on early learning in those subjects with targeted spending. The teacher salary matrix approved last year rewards experienced teachers with more pay.

The 2024 budget includes a 2% raise for K-12 and community college educators. 

According to Senate leadership, the spending proposal provides $5.9 billion to K-12 learning, $2.4 billion to higher education and $195 million to early childhood education. 

The proposals now move to the House where additional changes could be made.

Alabama Daily News Publisher Todd Stacy contributed to this report. 

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