After months of discussion about modernizing Alabama’s school funding system, Gov. Kay Ivey now plans to direct $100 million toward high-needs schools and students.
Officials are still debating options to overhaul school funding, but Ivey’s one-time earmark is the first public indication of her support for rethinking the state’s decades-old formula, which is based on headcount.
State Finance Director Bill Poole said Ivey’s budget proposal, which adds up to $10 billion in recommended spending, is a starting point and will kickstart future discussions on how best to target certain groups.
“Know that this has been an ongoing conversation, so we’ll certainly have to contemplate how to best set those out,” he said.
Next week, a committee will likely review a “hybrid” school funding plan, which will keep the state’s current method of funding schools and teachers intact, while allocating extra money to specific student groups.
Ivey plans to draw the money from the Educational Opportunities Reserve Fund, a new savings account for educational expenses. Currently, she plans to earmark:
- $40 million for high-poverty schools,
- $40 million for students with disabilities,
- and $20 million for sparsity, or more rural schools.
Sen. Arthur Orr, R-Decatur, who is leading the study on school funding, told reporters that the committee plans to prioritize funding for English learners, economically disadvantaged students, students with disabilities and gifted students. Members will meet on Feb. 13 to adopt a final report.
State Superintendent Eric Mackey said he was thrilled about the plan. He previously told reporters that he believed it would help schools target students who are struggling the most.
“It’s an excellent plan,” he said. “It’s well laid-out. It’s very thoughtful. I couldn’t think of a better way to do it.”
Education Trust Fund
Ivey is also proposing a 6% increase to the current education budget, to amount to a total of $9.9 billion. (View the full proposal here.)
Of that amount, $6.7 billion is budgeted toward K-12 schools and $2.6 billion will go toward higher education institutions.
Among the key items on the K-12 budget:
- $12 million to expand the state’s first-class Pre-K program
- $101 million for the CHOOSE Act, to support families who send students to private schools
- $27 million for 220 math coaches
- $14.4 million for summer and after school programs
- $10 million for English learners
- $5 million for behavior analysts
Ivey also plans to allocate $621.9 million to community colleges, an increase of about 6%, and a 5.67% increase in funding to universities for operations and maintenance costs.
The budget increase comes as schools across the state brace for a federal fiscal cliff; many have cut key staff as COVID funding ended.
Finance directors on Wednesday also warned against excessive spending. Revenues are returning back to pre-pandemic levels after historic spikes, while costs for Medicaid and insurance plans are rising.
“The sugar high is over, and we need to contemplate that,” Poole told lawmakers.
To supplant rising costs, Ivey plans to take nearly $100 million out of the Education Trust Fund to front part of the cost of PEEHIP increases and about $40 million to address rising rates for the teacher’s retirement system.
Lawmakers said efforts to keep education spending low have helped to keep budgets stable against current headwinds.
“Things are looking OK on the education side,” Orr said. “Not big-time gangbusters, but certainly a healthy growth.”
Mark Dixon of A+ Education Partnership, an education advocacy group that has championed school funding reform, said Ivey’s $100 million investment would be a “huge step forward.”
“We’re so grateful for the governor to prioritize student needs and are committed to working through this process for the potential of a new hybrid formula,” he told AL.com. “We’re just very grateful.”
One-time allocations
Ivey is proposing a supplemental budget of $524 million, down from $651.2 million last year, for one-time educational expenses. The money is essentially what’s left over from other funds, and will likely be very minimal in future years, Poole said.
About two thirds of the supplemental budget will go toward K-12 initiatives, including:
• $100 million for transportation and fleet renewals
• $50 million for school safety training
• $50 million for the CHOOSE Act
• $30 million for summer and after-school programs
• $28 million for textbook adoptions
• $20 million for college and career readiness grants
• $14 million for supplements for principal and assistant principals
• $10.3 million for charter school grants
• $10 million for a Struggling Readers Beyond Grade 3 program
• $5 million for Automated External Defibrillators in schools
• $5 million for TEAMS, the math and science educator incentive program
Another 27% will go toward higher education projects, including $29 million for capital projects and deferred maintenance at community colleges, and $102 million for universities.
Ivey plans to allocate an additional $34 million for other services aimed at expanding broadband, cyber security and department transitions. View the full supplemental bill here.
