Alabama Legislature sends 2026 ETF, General Fund budgets to Gov. Kay Ivey

The Alabama Legislature Tuesday gave final approval to the state’s two budgets for the 2026 fiscal year, but not without a battle. 

The Alabama Senate passed a $3.7 billion 2026 General Fund budget late Tuesday night on a 30-0 vote after an hours-long slowdown. 

HB 186, sponsored by Rep. Rex Reynolds, R-Huntsville, would provide a 10% increase ($347 million) over the current budget for the 2026 fiscal year, which starts October 1. 

“In many cases, you had a reduction in what your request had been. Everyone of us had that … so we’re in a dichotomy here where we have the largest budget we’ve ever had, and yet, we have the tightest constraints and control that we’ve had in recent memory,” said Sen. Greg Albritton, R-Atmore, who chairs the Senate Finance and Taxation General Fund Committee, pointing to Medicaid’s significant budget increase that will bring its budget to over $1 billion.

Sen. Rodger Smitherman, D-Birmingham, asked for the 125-page funding bill to be read in its entirety Tuesday afternoon, which delayed the vote by hours. He said after the Senate adjourned that he didn’t want controversial bills to be passed without deliberation, and that he was afraid the Senate would move to adopt a different set of bills to consider. 

“[The House] did have a second calendar, and it was going to be the same thing here in terms of the desire to have a second calendar, and I thought that we need to just work on that particular calendar,” Smitherman said after the Senate adjourned.

The Alabama Medicaid Agency, which provides health insurance for over 1 million Alabamians, nearly all children, elderly citizens and those with disabilities, will get $1.179 billion from the state, a $223.8 million (19%) increase over this year. Ivey requested $1.184 billion in February, about $5 million more than what the House approved.

The Alabama Department of Corrections, which administers the state prisons, will get a $90.1 million increase (11%) to $826.7 million.

The Alabama Department of Human Resources, which provides child and adult protective services, enforces child support payments and administers food and family assistance, will get $148.9 million from the state in 2026, a $4.7 million (3%) increase from the current budget.

The Alabama Department of Mental Health, which provides mental health care services in the state, will get a $4.7 million increase (2%) to $244 million. The Legislature cut the funding from Ivey’s recommendation by $3.7 million.

But senators also appeared to want to send a message to the Alabama Board of Pardons and Paroles, which has drawn mounting criticism from Democratic and Republican senators over low parole rates and what senators consider a lack of responsiveness to their questions about the parole process. The Senate cut the board’s funding from $94.5 million to $90.6 million, a 4.1% decrease. 

In addition, Sen. Clyde Chambliss, R-Prattville, added an amendment to make funding for the Board of Pardons & Paroles conditional on the board developing parole release guidelines. The amendment passed on a 27-0 vote.

“What they do, as y’all know, they adopt guidelines. Those are supposed to be updated and revised. They have not done that,” he said.

The board has faced backlash after parole rates declined significantly after 2017, when members granted parole to about 54% of applicants. The rates fell as low as 7% at times, according to an analysis by the ACLU of Alabama in 2023, but rebounded to slightly more than 20% within the past year.

The Senate also passed HB 185, also sponsored by Reynolds, which would appropriate $50 million in American Rescue Plan Act (ARPA) funds to the Department of Finance and provide over $12.6 million to the Unified Judicial System.

“This bill is supplemental monies just taking federal money and appropriating it,” Albritton said.

The House concurred with the changes late Tuesday evening, sending the bill to Gov. Kay Ivey. 

The Senate also concurred with House changes to SB 112, sponsored by Sen. Arthur Orr, R-Decatur, a nearly $10 billion 2026 Education Trust Fund budget (ETF). 

The House changes added $17.6 million to the budget, bringing it to a 6% increase over the 2025 ETF budget. The budget does not contain pay raises for teachers in the 2025-26 fiscal year, which starts Oct. 1. But it includes a $99.2 million increase for the Public Education Employees’ Health Insurance Plan, as well as funding for workman’s compensation for education employees and paid parental leave. 

The Senate also concurred with the ETF supplemental funding bills, including SB 113, also sponsored by Orr, a $524 million 2025 supplemental appropriation for education that passed the House with an amendment changing language to clarify dual enrollment programs funding.

The Senate also concurred with House changes to SB 111, sponsored by Orr, which would appropriate $375 million over three years to implement changes to the state’s school funding formula. 

The House added an additional $80 million from the Education Opportunity Reserve Fund to the Creating Hope and Opportunity for Our Students’ Education (CHOOSE) Act Fund, a voucher-like program that gives tax credits for non-public school spending, including private school tuition. The first-year cost estimate will go from $100 million to $180 million, an 80% increase. Over two-thirds of applicants to the program are already in private school or are homeschooled.

The story was updated at 10:30 a.m. to include comment from Sen. Rodger Smitherman, D-Birmingham, regarding the procedural delay.