BIRMINGHAM, Ala. – The Senate Finance and Taxation Education Committee on Wednesday approved the FY27 $12.4 billion Education Trust Fund budget package, adding a one-time bonus for education retirees equal to $1 per month for each year of service.
That means a retiree who worked 25 years would receive a total of $300, or $25 per month, before taxes. The House did not include any bonus funding for retirees in its version of the education budget package.
The Senate committee also approved a $32.3 million allocation to pay for that bonus as part of the $10.5 billion Education Trust Fund budget, with funding not coming directly from the budget, but from any excess tax revenue at the end of the 2026 fiscal year, which is Sept. 30.
Senate Bill 380, sponsored by Education Budget Chairman Arthur Orr, R-Decatur, appears to be in lieu of the cost-of-living adjustment education retirees have been asking for, but officials say they are grateful for the bonus.
“We’re very appreciative,” Alabama Education Retirees Association Executive Director Wendy Lang told Alabama Daily News. “We were hoping for more, but we will continue to push toward our ultimate goal: a substantial COLA.”
Lawmakers have given education retirees one-time bonuses in three separate years, but they have not received a COLA since 2007.
In 2008 and 2022, education retirees received a one-time bonus equal to $2 per month for each year of service. In 2018, they received a one-time bonus of $1 per month for each year of service.
According to the AERA, more than 60,000 of the 100,000 retired education employees have income that places them at or below the federal poverty level.
Teacher Retirement System officials told ADN that a 1% COLA increase would cost roughly an additional $27 million per year or as much as $254 million to prefund the total increase.
According to a social media post, about 300 education retirees met with their legislators at the State House on Tuesday, rallying for a COLA increase.
Meanwhile, lawmakers have included a 2% pay raise for education employees in the FY27 education budget that is expected to cost an additional $100 million.
Beyond the retiree bonus, the Senate committee made few changes to the broader education budget package. Orr told committee members the Senate will take up the budget on the Senate floor on Thursday.
While some individual line items changed in the regular ETF budget, House Bill 238, the biggest difference from the House version was the addition of the $32.3 million appropriation for the one-time retiree bonus at the end of the bill.
The Senate committee also added language in the last section that would prohibit colleges and universities that receive ETF funding from setting a per-credit-hour amount for dual enrollment or early college that is lower than what the Alabama Community College System charges.
The committee made only one change to House Bill 235, the $420 million supplemental appropriation, moving $400,000 from Birmingham’s McWane Center to the Barber Motorsports Museum at the request, Orr said, of the Birmingham delegation.
The committee shifted funding for school-level earmarks in the $1 billion Education Advancement and Technology Fund appropriation, House Bill 236, but the amounts distributed based on enrollment stayed the same for K-12 and higher education.
No changes were made to the appropriations in House Bill 237, House Bill 240, House Bill 241 and House Bill 242.
TAGGED:Education | Alabama Legislature
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