Gov. Kay Ivey on Monday signed Alabama’s budgets for the 2026 fiscal year.
The Education Trust Fund (ETF) will provide nearly $10 billion in funding for the state’s various education programs and agencies, and is a 6% increase over the previous year. The General Fund budget totals $3.7 billion for the 2026 fiscal year, a 10% increase ($347 million) over the current budget.
Both budgets go into effect on Oct. 1.
Ivey said in a statement that the budgets are an investment in the state’s education.
Alabama Governor Kay Ivey speaks during the groundbreaking ceremony for the Montgomery Intermodal Container Transfer Facility in Montgomery, Ala., on Thursday February 27, 2025.
“The budgets we made official this morning will continue investing in proven programs like the Literacy and Numeracy Acts. It will support our Turnaround Schools initiative to target some of our lowest performing schools. It will continue allowing these successful education reform policies to take shape while taking an active approach to do everything we can to support students, teachers and parents,” Ivey said in a statement.
The ETF budget includes a $99.2 million increase for the Public Education Employees’ Health Insurance Plan. There are no pay raises for education employees in the budget. It also includes $9.6 million to support a newly enacted parental leave policy for state and education staff and $15.6 million designated for an employee injury compensation program. It includes significant funding boosts for key programs: AMSTI would increase by 31% ($32.2 million), ARI by 6.4% ($9 million) and transportation by approximately 9.1% ($40 million).
The budget also provides $180 million for the CHOOSE Act, a voucher-like program that provides tax credits for nonpublic education expenses, including private school tuition. The program was initially slated to receive $100 million. Over two-thirds of applicants for the CHOOSE Act come from private schools or are homeschooled.
The General Fund budget includes a $223.8 million (19%) increase over the current year for the Medicaid Agency, totaling $1.18 billion; a $90.1 million (11%) increase for the Alabama Department of Corrections, for a total of $826.7 million; a $4.7 million (3%) increase for the Alabama Department of Human Resources, totaling $148.9 million; and a $4.7 million (2%) increase for the Alabama Department of Mental Health, totally $244 million.
Funding for the Alabama Board of Pardons and Paroles was reduced from $94.5 million to $90.6 million, a 4.1% decrease, in the Senate due to some lawmakers’ concerns over low parole rates and responsiveness from board members. The amendment also made the board’s funding conditional on the development of parole release guidelines. The board has faced criticism for significantly lower parole rates since 2017.
The state is also increasing its contribution to employee health insurance. For each education employee, the PEEHIP contribution will go up from $800 to $904, and the SEIB contribution for each state employee will increase from $997 to $1,025.
Alabama Reflector is part of States Newsroom, an independent nonprofit website covering politics and policy in state capitals around the nation.
This article originally appeared on Montgomery Advertiser: Alabama governor signs 2026 ETF, General Fund budgets
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