The Senate General Fund budget committee Tuesday approved a proposed fiscal 2027 spending plan that includes slightly more money than this year’s and several more requirements of state agencies.
The $3.72 billion spending bill is about $37.1 million more than what Gov. Kay Ivey sent to lawmakers two months ago and about $8.5 million more than the current budget.
Increases include $10 million for the Legislature’s first payment on the new State House under construction by the Retirement Systems of Alabama. Its completion is expected later this year and lawmakers will move in prior to the 2027 session.
There’s also an additional $5 million for the state court system, bill sponsor and committee chairman Sen. Greg Albritton, R-Range, told Alabama Daily News.
Tuesday evening, Albritton said he expects the bill to get a Senate vote today.
You can see a comparison of this year’s spending, Ivey’s proposal and what the Senate committee approved Tuesday HERE.
Raises and insurance
Ivey and lawmakers’ 2027 spending plan includes a 2% raise for state employees. That will cost about $16 million per year.
There is also $18 million per year to increase the state’s contribution to the State Employees’ Insurance Board to $1,175 per member per month. That board was facing a shortfall for next year.
The SEIB, which provides health insurance and benefits to around 90,000 active and retired state employees and their dependents, has faced potential budget shortfalls due to federal policy changes, including a reduction of the federal government’s cost share of prescription drugs, and a cut to Medicare payouts.
“It’s not (SEIB’s) fault that insurance premiums are going up,” Albritton told ADN when asked about fully funding the increase. “They’re taking the steps to get a handle on things better in several different ways. So we just felt like we needed to give them a break.”
Conditionals
There are also some conditional appropriations in the committee-passed bill, some with serious consequences for the departments of human resources, mental health and corrections.
The Alabama Department of Human Resources receives $148.36 million in the proposal. But language in the budget says the first quarter allotment of those funds will only be released if the Supplemental Nutrition Assistance Program, often called food stamps or SNAP, error rate for the state is at or below 6% by the end of fiscal year 2026 or ADHR modifies “SNAP benefits or eligibility as necessary to cover any penalty imposed on the state beginning in fiscal year 2028 for not reducing the error rate to 6% or below by fiscal year 2026.”
Lawmakers earlier in the session were displeased by what they said was a lack of response from ADHR on how to address the looming cost-sharing requirement that is part of the One Big Beautiful Bill Act, signed by President Donald Trump last year. The law allows the federal government to shift up to 15% of SNAP benefit costs to states, depending on how accurately they administer the program.
The state could be on the hook for $200-plus million if it doesn’t lower its error rate, which ADHR Director Nancy Buckner in January said was recently about 9%.
A rate below 6% does not require a state match.
In 2024, Alabama’s rate was lower than eight other southern states and nearly half of those in Florida and Georgia.
Daniel Sparkman, a spokesman for ADHR, told ADN Tuesday night the department is reviewing the substitute bill and its impact on the agency.
Albritton’s proposed budget also allocates $36 million for the Alabama Department of Mental Health’s six crisis centers in the state. The centers are designed to provide acute care to people with mental health emergencies and make referrals to longer-term care if needed.
According to the budget bill, the department won’t receive that funding in the third and fourth quarters of 2027 unless it reports to lawmakers on “the operating expenses of each center, including the number of employees, and the number of persons served at each center.” It must also allow the Commission on the Evaluation of Services to have access to the centers for purposes of evaluation.
The commission last year attempted an evaluation of the centers, but said a lack of consistency in data reporting makes it difficult to determine their effectiveness.
At a public meeting in September, ADMH Commissioner Kim Boswell and her staff pushed back on the ACES analysis, saying that the department can’t turn over protected health information due to federal law and that such a barrier shouldn’t be seen as a “deficiency.”
The budget allocates $867.91 million to the Alabama Department of Corrections, second only to Alabama Medicaid’s $1.18 billion. But $40 million of ADOC’s funding is contingent on the state’s new prison in Elmore County being 90% complete and the completion of utility infrastructure for the new prison in Escambia County. The ADOC is also required to make monthly staffing reports to lawmakers and the state finance director.
The new Elmore County prison was originally expected to open this spring, but that was pushed back last year.
Reports on spending for local governments
Also in the spending bill is a requirement that all agencies funded in the budget that provide “direct assistance or support to local governments from state funds” shall report that spending to lawmakers by the 2027 session. The agencies must also provide any memorandums of understanding they have with local governments.
Albritton told ADN lawmakers hear too often about state agencies paying for services to municipalities and counties that they should be funding “just because.” Examples range from inmate housing for a county without a jail to mosquito abatement paid for by the Alabama Department of Public Health, he said.
“We’ve got to get a better handle on this,” Albritton said.