MONTEVALLO, Ala. – Alabama’s K-12 schools are still in the first month of the new school year, but state board of education members are already looking ahead to how much money they’ll need for the 2026-27 school year.
State Superintendent Eric Mackey shared a first draft of requests for fiscal year 2027 budget during the board’s retreat at American Village Wednesday morning.
The draft – a $6.6 billion spending plan for Alabama’s K-12 schools, up $347 million from the FY26 budget – prioritizes early math instruction, support for struggling readers in grades four through eight, career technical expansion and school safety.
With growth in the Education Trust Fund capped at 5.75% for FY27, Mackey said he doesn’t expect to get everything the draft calls for. The statutory cap means no more than $10.4 billion, including about $570 million in new money, will be available across K-12, higher education and other education-related expenditures in the FY27 budget.
Mackey said the secondary spending cap, put in place by lawmakers in 2023, has changed how educators approach budgeting. In recent years, strong tax collections have left the state with recurring surpluses, which lawmakers then direct into a separate supplemental appropriation. Between 2021 and 2025, lawmakers allocated nearly $7 billion in supplemental tax revenue from the ETF.
“We created this permanent surplus,” Mackey said. “And then the surplus either goes into one of the three savings accounts or it gets put into a supplemental appropriation.”
“I think we’re in a place where we will permanently, always and forever have a supplemental budget in addition to what we call the direct budget,” he said.
District officials now think in terms of what they should include in their budget but also what might come in a supplemental appropriation – after tax receipts are finalized and appropriated – halfway into the budget year. The most recent supplemental appropriation (from surplus 2024 tax year receipts) was $524 million, appropriated in April.
While it’s good to have additional money to spend, it becomes a problem when district officials expect to receive additional money and then don’t.
“It gets to be dangerous,” Mackey said. “Because supplemental funds are never guaranteed.”
Because of that, Mackey said he wants to protect certain essential programs, including $30 million for summer elementary programs and $12 million for reading supports for struggling readers beyond grade three.
The board typically holds two retreats a year – one to coincide with the legislative session and one in August – for a deeper look at specific issues. Retreats differ from work sessions, which preview items up for a vote at the next board meeting.
The FY27 draft does not include funding for teacher pay raises, though Mackey noted there has been some talk of an increase. The decision on pay raises typically comes from the Governor as part of her budget proposal.
The board plans to discuss the FY27 budget again during their Sept. 11 work session and vote on a final budget on Oct. 9. State agencies must have their FY27 budgets to Gov. Kay Ivey by Nov. 1. She will present her budget before the Jan. 13 start of the 2026 legislative session.
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