Alabama Gov. Kay Ivey increases state budgets, signs landmark school funding reform package

Alabama Gov. Kay Ivey Increases State Budgets, Signs Landmark School Funding Reform Package

Montgomery, AL — In a bold move aimed at reshaping Alabama’s educational landscape and strengthening public services, Governor Kay Ivey has signed into law a sweeping new state budget plan that includes historic increases in education and general fund spending, along with a landmark school funding reform package that leaders say could change the future of the state’s schools for generations to come.

Surrounded by bipartisan lawmakers, educators, and community leaders at the Alabama State Capitol on Monday, Gov. Ivey officially approved the Education Trust Fund (ETF) and General Fund budgets for fiscal year 2025. Together, they total over $14 billion, marking the largest combined spending package in state history.

“We are investing in the future of Alabama — our children, our educators, our workforce, and our communities,” Ivey said during the signing ceremony. “This budget reflects our values. It prioritizes education, public safety, and economic opportunity while maintaining our commitment to fiscal responsibility.”

At the heart of the new legislation is the Foundation Program Modernization Act, a major school funding reform package designed to update how the state allocates money to K-12 schools. For decades, Alabama’s funding formula has been criticized for being outdated and inequitable, failing to reflect the needs of rural and underserved school districts. The new model will tie funding more directly to student needs, enrollment, and local district challenges, allowing for greater flexibility and targeted support.

Education officials across the state praised the move. Dr. Eric Mackey, Alabama’s State Superintendent of Education, called it a “transformational step” toward equity and excellence. “This gives us the tools to close learning gaps, support struggling schools, and invest in areas that have long been underfunded,” he said.

Key highlights of the new education budget include:

• $630 million increase in K-12 funding
• Expanded support for special education and mental health services
• Funding for teacher pay raises and recruitment incentives
• Additional resources for career technical education (CTE) and workforce readiness programs
• Increased allocations for rural school transportation and infrastructure

Meanwhile, the state’s General Fund budget, totaling over $3 billion, includes significant investments in public safety, healthcare, and broadband expansion. The Alabama Law Enforcement Agency (ALEA) will receive funding for new trooper classes, and rural health clinics will benefit from a newly established grant program aimed at improving access and technology.

Republican and Democratic lawmakers alike hailed the bipartisan nature of the budgeting process. “We’ve shown that when Alabama comes together, we can achieve real progress,” said Senate President Pro Tem Greg Reed.

As the state prepares to implement the reforms, school districts will begin transitioning to the new funding model in the 2025-2026 academic year. Gov. Ivey emphasized that this is just the beginning: “We’ve laid the foundation, but our work is not done. I remain committed to ensuring that every child in Alabama has access to a world-class education — no matter their ZIP code.”

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