Alabama lawmakers shift priorities for spending $2.8 billion in excess revenue

Alabama lawmakers today shifted priorities for how a record $2.8 billion in excess tax revenue leftover from 2022 could best be spent, giving more back to taxpayers, and putting less in a new savings account.

The House education budget committee approved funding a tax rebate worth twice what the Senate approved, upping the cost to $550 million. Consequently, a new savings account called the Educational Opportunities Reserve Fund will only get half of what the Senate approved, or $280 million under the House committee proposal.

A capital grant program for K12 schools that the Lt. Governor’s office would administer was cut from $180 million to $104 million. A bill creating the program was also approved by the committee Wednesday, with the House committee amending the bill to require schools to get approval from House members as well as Senate members before a grant would be issued.

Renovations for higher education facilities and K-12 capital needs again dominated the proposal.

The list of higher education projects - which will get a full one-third of the $2.8 billion under the committee’s proposal - included everything from deferred maintenance for aging community colleges to soon-to-be-built workforce training centers to specialty facilities around the state.

The proposal was approved by the committee alongside a record $8.8 billion education budget and a 2% pay raise for public education employees. The House is expected to take up the education budget on Thursday.

Chairman Danny Garrett, R-Trussville, said they received a lot more requests than they had money to fund in the supplemental appropriation. “We’ve tried to move to the point that we can address as many needs as we can within the spirit of what we’re trying to accomplish as a legislature.”

“We believe we’ve equitably distributed the funds around the state.”

Just under half of the money allocated would go for one-time expenditures like capital projects and deferred maintenance, which lawmakers have said is the best way to use the extraordinary tax revenue surplus in the Education Trust Fund.

Nearly all of the $486 million proposed for the two-year colleges would go to build or rebuild buildings, with a big focus on workforce training and career tech facilities.

Rep. Anthony Daniels, D-Huntsville, said he’s concerned about Alabama’s ability to recruit students to attend colleges with aging facilities.

“We’re expecting these institutions to continue to recruit the best and brightest,” Daniels said in committee. “We have to make certain that the age-old buildings and the crumbling infrastructure that they have - we have to make certain that we’re making investments there.”

Later in the meeting, Garrett addressed further questions about the need for large amounts of money to be allocated to renovations and deferred maintenance.

“We rarely have the funds to set aside a lot for these capital needs,” Garrett said. “So basically the deferred maintenance is a way for us to give money to universities unencumbered for those type issues they can use as they see the need.”

The rest of the House committee version doesn’t stray too far from the Senate-approved version.

The proposal restores funding for the Saban Discovery Center from the $15 million Senate version back to the original $25 million the Governor had proposed.

“The Saban Discovery Center, which is a museum but also a STEM teaching hub that will become, we think, a model for regional STEM teaching hubs around the state,” Garrett said.

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A new line item in the House proposal gives $1.7 million to Selma City schools to repair tornado damage to four schools in the district, Garrett said.

The bill is part of the education budget package, which the committee approved with a few changes in full on Wednesday. The House could take up the budget as early as Thursday. Because the House version differs from the Senate’s, the budget and the supplemental appropriation are likely headed to a conference committee.

The House committee made few changes to the Senate version of the $8.8 billion regular education budget. One change it did make was to make sure K-12 school support personnel are being paid fairly across the state.

The House committee moved a $15 million line item the Senate had added to increase salaries for school support personnel. That funding was attached to the K-12 Foundation Program, which is the main mechanism for funding schools statewide, requiring schools to pay at least $15 per hour to support personnel.

The committee separately approved the 2% pay raise for all public education employees.

Read more: Alabama teachers might get a pay raise. How much do districts pay now?

The House committee upped the allocation to a grant program for K-12 schools to provide services to gifted students by more than 50%, increasing funding from $900,000 to $1.4 million.

The split between K-12 and higher education was nearly identical, with 68% going to K-12 schools, 26% going to higher education and 6% going to other agencies and nonprofits providing educational services.

In other action, the committee doubled the tax rebate the Senate approved and approved a bill phasing down a tax on groceries.

The House is expected to take up the budget on Thursday.