Alabama House approves $3.3 billion General Fund budget

The Alabama House of Representatives Thursday approved a $3.3 billion General Fund budget for 2025 with a 2% raise for state employees and a $253 million supplemental funding bill for the current fiscal year.

Representatives approved a substitute developed by the House Ways and Means General Fund Committee.

“Your substitute mainly focused on going back and reinstating all the line items that were cut in the Senate from all the governor’s previous budget,” said Rep. Rex Reynolds, R-Huntsville, chair of the Ways and Means General Fund Committee. “I just felt like the agencies that provide services for all Alabamians needed to be restored as much as possible.”

The Senate passed the General Fund on April 12.

Under the House-passed version, the Alabama Department of Corrections will receive about $736.5 million in the 2025 fiscal year, which starts Oct. 1. That is an increase of almost $3 million from what the Senate passed, and almost $40 million more than the agency was allotted last year.

The Alabama Medicaid Agency was left untouched from the Senate’s version at about $955 million, roughly $91 million more than what the state budgeted in 2024.  Reynolds said that was an attempt to make up for a decline in federal matching dollars.

The federal government pays for nearly 73% of Alabama’s Medicaid program, according to KFF, a nonprofit health news organization. That  percentage is higher than any other state except Mississippi and West Virginia. Five years ago, the federal government paid for 78% of the program.

“That is no expansion of Medicaid,” Reynolds said. “That is simply playing catch up to the years that we didn’t fully fund Medicaid due to the increase in federal dollars. Now we are seeing a decline and have to increase that amount. Hopefully we don’t see that every year.”

The Alabama Department of Mental Health will receive almost $238 million, an increase of about $2.8 million from what the Senate approved, and about $24 million more than what it was allocated in 2024. The Alabama Department of Human Resources is set to receive roughly $144 million, almost $3.5 million more than what the Senate offered, and about $17 million more than what the agency was budgeted for in 2024.

The House budget will give the Alabama Department of Public Health almost $130 million, roughly $1 million more than what the Senate approved and about $13 million more than what the agency received for 2024.

The Alabama Law Enforcement Agency will receive almost $130 million, an additional $5 million more than what the Senate had approved and about $10 million more than what it took in the previous year.

Revenues have increased for the state from several sources, including the simplified sellers use tax, ad valorem taxes as well as additional money from interest on deposit accounts. That has resulted in budgets that have increased in consecutive years since 2019. Reynolds said revenues in the General Fund grew 16.6% between 2022 and 2023.

The budget goes back to the Senate for concurrence in House changes or a conference committee. The 2% pay raise, passed in a separate piece of legislation, goes to Gov. Kay Ivey.

There are three legislative days left in the 2024 regular session of the Alabama Legislature.