Sen. Arthur Orr, R-Decatur, speaking to senators at the Senate Finance and Taxation Education Committee meeting on April 1, 2026, about the fiscal year 2027 Education Trust Fund budget in the Alabama Statehouse in Montgomery, Alabama. The committee approved the $10.5 billion budget with minor changes and a vote on it is expected on Thursday. (Anna Barrett/Alabama Reflector)
An Alabama Senate committee Wednesday approved a $10.5 billion Education Trust Fund budget for fiscal year 2027 that largely reflects Gov. Kay Ivey’s proposed budget from earlier this year.
The budget, about $570 million higher (5.7%) than the current budget, includes pay raises for teachers and less money for a health insurance program for education employees than Ivey proposed.
Although the total is the same as the House passed on March 14, funds were redirected to different programs, according to Sen. Arthur Orr, R-Decatur, chair of the Senate Finance and Taxation Education Committee.
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“Some of the numbers go up and down in the budget document itself,” Orr said in an interview after the meeting. “But not a lot moved around, and we knew that, because Chairman [Danny] Garrett [R-Trussville] and I had things pretty well worked out for the House passed version.”
The Public Education Employees Health Insurance Plan (PEEHIP) will be funded at a $1,048 per member per month rate, leaving the rest of the funding to the PEEHIP board to meet rising health care costs.
“There’s a little bit of variable moving around related to PEEHIP in the budget, where you would see some reductions in the various agencies. They’re small reductions, but it’s PEEHIP related,” Orr said during the meeting.
The CHOOSE Act, a voucher-like program giving $7,000 to qualifying children for non-public education expenses, including private school tuition, will see its funding go up from $180 million to $251.2 million, a 38% increase. About $1.2 million will come directly from the ETF. The remainder of the funds comes from the ETF transfer and the CHOOSE Act fund.
Orr said after the meeting that the Senate changes included more funds for school counselors and social workers, “particularly in school systems where the children have a lot of challenges to be focused on educational matters.”
“So those school based counselors slash social workers, that increase should help,” he said.
Although federal surplus funding from the COVID-19 pandemic is over, Orr said that the state is still “in good shape.”
“We see those surplus revenues declining, and as they decline, things get tighter. We don’t see as much year-over-year growth in the K-12 world or in the higher education world,” he said. “We’re reverting to the means and trajectory that we used to have before COVID. It’s not a bad thing, but then again, it makes for belt tightening after you’ve lived large at the food bar for a couple years.”
The budget is expected to be up for a vote on the Senate floor on Thursday.
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Author: Anna Barrett