Alabama Lawmakers Finalize Record $12.4B Education Budget Boost

MONTGOMERY, Ala. — Alabama's Legislature has finalized a $12.4 billion Education Trust Fund (ETF) budget for fiscal year 2027, marking the largest in state history and eclipsing Gov. Kay Ivey's January proposal of $10.5 billion.[1][5] The package, passed by the House and Senate in early April 2026, allocates $100 million for a 2% pay raise for teachers and provides a one-time bonus for retired educators, according to House Speaker Nathaniel Ledbetter and Ways and Means Education Committee Chairman Danny Garrett.[2][5] Combined with $1 billion from the Advancement and Technology Fund, the budget directs about $7.59 billion — or 72% — to K-12 education, $2.89 billion to higher education, and boosts programs like the First-Class Pre-K expansion covering 47% of four-year-olds statewide.[2] Key initiatives received substantial funding: $151.9 million for the Alabama Literacy Act, $114 million for the Numeracy Act with 33 regional math specialists, $81 million for the RAISE Act's needs-based school funding, and $100 million level-funded for the CHOOSE Act education savings accounts, totaling $250 million with prior revenues.[2][1] The budget also covers $180 million for the Public Education Employees’ Health Insurance Plan (PEEHIP), $226 million for pre-K, $150 million for regional career technical centers, and $65 million for the CHEER Act's outcome-based higher education model.[2] These investments build on Ivey's recommendations for K-12 retirement rates, health costs and operations at Alabama's four-year universities and community colleges.[1] Lawmakers hailed the budget as a balanced commitment to educators and student outcomes without overburdening taxpayers. 'This reflects our continued investment in education programs,' Ledbetter said, while Garrett emphasized responsible stewardship.[2] The ETF anticipates a $1.1 billion beginning balance, prioritizing public safety alongside classroom gains in a state where K-12 comprises 68% of appropriations.[1][2] As the fiscal year begins Oct. 1, 2026, Alabama districts from Birmingham to Mobile stand to benefit from enhanced mental health coordinators, dual enrollment and workforce training.[1]