Alabama House committee approves record $12.1B education package, adds $80M for school choice

MONTGOMERY, Ala. — An Alabama House committee on Tuesday approved a $12.1 billion education budget package, including an additional $80 million for the state’s new school choice program, nearly doubling the original allocation.

The House Ways and Means Education Committee approved moving the extra funds from the Education Opportunities Reserve Fund to the CHOOSE Act fund. The EORF was established in 2023 to hold surplus tax revenues for future education needs.

“We initially appropriated $100 million for the CHOOSE Act, and that was based on roughly 15,000 or 16,000 students,” House Education Budget Chairman Danny Garrett, R-Trussville, explained. “We’ve had applications that are up to around 36, 37 thousand.”

The CHOOSE Act provides up to $7,000 for education savings accounts for eligible families to use for public school out-of-district or private school tuition along with other approved educational expenses. Homeschoolers are eligible for $2,000 per student, up to $4,000 per family.

“We want to make sure that anyone that applied, that’s under that income cap requirement for the first year, is able to be accommodated,” Garrett said. 

Eligibility is limited to families with adjusted gross incomes below 300% of the federal poverty level for the first two years of the program. According to the Alabama Department of Revenue, about 75% of Alabama families meet those guidelines. 

The newly-added $80 million will be temporarily set aside, Garrett added.

“Whatever money is not used for those applications will revert back to the reserve fund,” he said.

Beyond additional funding for ESAs, of the $455 million total proposed draw from the EORF, $375 million would fund a new K-12 school funding formula that gives schools additional funding based on students’ needs: $100 million to be distributed in FY26; $125 million in FY27; and $150 million in FY28 

The $12.1 billion education budget package also includes:

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• $9.9 billion in the regular FY26 Education Trust Fund, a 6% increase over the current year, the maximum increase allowed;
• $524 million in supplemental appropriations using surplus FY24 revenue;
• $455 million from the Education Opportunities Reserve Fund;
• $1.25 billion from the Advancement and Technology Fund for one-time expenses such as capital improvements and technology.

A portion of the Advancement and Technology Fund allocation is earmarked for new regional career technical education centers. The House version includes $100 million for the Alabama Department of Education to distribute to school districts based on a grant application. 

At least two districts must collaborate for an application to be considered, and a sliding scale for local matching funds will apply, Garrett said.

The budget proposal does not include teacher pay raises, a change from recent years. Teachers have received raises in seven of the last ten years, typically between 2% and 4%. Garrett said concerns this year were focused on rising employee health care costs.

The state’s monthly contribution to the Public Education Employees’ Health Insurance Plan will increase from $800 to $904 per employee in the FY26 budget.

“What we were hearing from the education community was that they really wanted that PEEHIP increase covered – that’s almost $100 million out of the budget to keep the PEEHIP costs under control,” he said. 

The spending package also includes funding for two new educator benefits – paid parental leave and a workers’ compensation program – both of which were approved by lawmakers earlier this session.

The House could take up the budget package as early as Thursday. It will return to the Senate for concurrence before heading to the governor.

This story is from aldailynews.com.