Alabama lawmakers aim to close funding gap for rural, poor schools

Alabama lawmakers are inching closer to a plan that could change the way schools are funded in the state.

Leaders of a legislative school funding committee said Thursday that there’s a strong possibility schools could soon see more money to address student needs. But it’s unlikely that a complete overhaul of Alabama’s school funding formula will happen this year.

“I think we clearly discussed that option one is doing nothing, and we heard loud and clear from several people today that that was not an option,” Rep. Danny Garrett, who co-chairs the commission, told reporters after the meeting.

Lawmakers are still weighing different plans to change the state’s decades-old school funding formula; a slate of potential funding options were reviewed last month. They could adopt a brand-new, student-weighted funding formula, or go with a temporary “hybrid” option that would keep the state’s current system intact while adding extra pots of money for specific student groups.

The commission plans to approve and present its final recommendations to the legislature shortly after the session begins on Feb. 4.

“We’ve come a long way, and we’ve got miles to go before we sleep,” co-chairman Sen. Arthur Orr, R-Decatur, told the commission Thursday.

How would a hybrid model work?

Alabama is one of just six states that still funds its schools based on student enrollment alone. Since 1995, the state has used local attendance to allocate money from the Education Trust Fund’s Foundation Program.

Currently, Alabama sends about $7,700 in state funding per pupil to local school districts. Those funds typically are used for staff salaries and other basic operational expenses. The state also allocates a few extra line items for student subgroups, but those funds are minimal and typically very restrictive, officials said.

While some initiatives may carve out extra funding for high-needs schools, just 1.2% of the state’s 2023-24 $5.3 billion education budget is directly targeted toward specific groups of students, such as English learners, gifted students, students with disabilities or students who are economically disadvantaged.

“You have to have an amount to be impactful, and the 1.2% that we’re doing now … is not enough to really move the needle like we need to move the needle in Alabama,” Orr told reporters.

A student-weighted formula, which would be based on student needs rather than headcount, would allow districts more flexibility to make decisions on how to spend state funds. But lawmakers said that model might be too complex to implement this year.

If the commission decides more time is needed to move forward with a different formula, they plan to implement a hybrid model in the meantime. That model would keep the underlying Foundation Program in place but would expand current investments toward specific student groups.

Kirk Fulford, deputy director of the Legislative Services Agency’s Fiscal Division, said it would still be feasible to pursue a hybrid formula this year without lifting taxes – even with impending budget increases for teacher retirement, health insurance and reading and math initiatives on the horizon.

He estimated that there is currently about $182 million extra in the state’s Education Trust Fund that could be directed to certain student groups. Starting in May, lawmakers also will have access to a $1.1 billion education reserve fund, which could be used toward the transition.

“This is definitely less complex,” he told lawmakers. “This would allow you to attack this as funding allows.”

Lawmakers on both sides of the political aisle said it’s past time to change the way schools are funded. Several said the hybrid plan was a middle-of-the-road option that would be more likely to gain approval in the legislature.

“Fear always comes up when you mention the word change, because we’ve become so comfortable with what we already know,” Rep. Debbie Wood, R-Valley, told the committee. “But I think the exciting thing is, in this state, we are looking to grow. We are looking to change. And we’re not going to be afraid of that.”

Sen. Bobby Singleton, D-Hale County, represents several of the state’s poorest school districts, many of which have seen declining enrollment over the years.

“Rural schools like I represent, poor schools, their gap has been getting wider,” he said. “So I think this is an opportunity for us to close that gap and to do what’s best for our children.”

Mark Dixon of A+ Education Partnership, an education advocacy group that has championed school funding reform, said the organization is in support of both options. A hybrid model would allow districts to ease into the changes, while still receiving more funding for “the kids that need it most,” Dixon told AL.com.

“A full student-weighted model would have, we think, a greater long-term impact, but a hybrid model up front would be a significant improvement and would really have a big impact on kids,” he said.

Next steps

The commission plans to meet in the first week of February to draft final recommendations. At that time, Orr said, he will have a clearer sense of the governor’s budget and can determine where the funding will come from, what the weights will be, and what limitations should be placed on schools and districts.

A bill outlining that process will have to be approved by both chambers, and ultimately the governor, before any of the money can be budgeted for school districts.

If a new formula is approved, the commission recommends it be phased in over a period of no more than five years.

“If we were to do the student-weighted model, I don’t think by fiscal year 2026 we could get all that has to be done to make that shift,” Orr said. “If we do the hybrid, I think it’s possible. We’ll have to make sure the accountability and the transparency steps are in there, and that’s part of the package, but I think it’s possible to begin dedicating more resources to those four or five areas that we discussed today.”

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