The Alabama State Board of Education discussed its draft FY27 Education Trust Fund (ETF) budget Thursday, requesting more than $6.5 billion in funding, with significant increases for transportation fleet renewal, school safety, struggling readers beyond 3rd grade and summer and after-school learning programs. From the expected $569.79 million FY27 ETF increase, approximately $387.45 million will fund K-12 education, based on the previous budget's percentage split with higher education. 

The draft budget request excludes one-time funds available in the ETF supplemental appropriation, expected to reach about $450 million. The Education Advancement and Technology Fund (EAT) will have approximately $1.2 billion available next year, and $300 million will be added back into the Educational Opportunities Reserve Fund (EORF), bringing its balance back to about $1 billion.

 The 2026 Regular Legislative Session convenes Jan. 13, when Gov. Kay Ivey will present her administration's recommended budget. The ETF budget begins in the Alabama House of Representatives next year.

FY27 Draft Budget

The largest requested increase is $136 million for transportation. State Superintendent Eric Mackey previously called school bus fleet renewal a "looming budget crisis" if not addressed within the next couple years. The state funds approximately 50% of the full cost of a new school bus, which costs around $160,000. The draft budget maintains current classroom divisors, instructional support unit salary extensions, classroom instructional support, substitute teacher pay rates and assistant principal allocations. It does not include funding for a pay raise (although any potential pay raise would likely appear in the governor's recommended budget).

The board will vote next month to approve the budget request due to the Executive Budget Office by the Nov. 1 constitutional deadline. View the draft budget request spreadsheet.

Alabama State Department of Education Requested Increases 

• Transportation Fleet Renewal - $136 million for new school buses.
• Struggling Readers Beyond 3rd Grade - $25 million for teachers and students in grade 4 and above who are not reading at grade level. The board discussed increasing this request to $52 million, which will be included in the budget request approved in next month's board meeting.
• School Safety, Security, and Climate - $50 million to match the previous FY26 budget request, of which just $15 million was funded in the one-time supplemental, and includes $2.9 million for additional School-Based Mental Health Services Coordinators.
• After-School and Summer Programs - $30 million to cover programs previously funded with federal relief funds and one-time supplemental appropriations. 
• College and Career Readiness Grants - $20 million for these grants which received $10 million in one-time supplemental funds this year.
• Alabama Numeracy Act - $19 million for K-5 math mentoring and support.
• Career and Technical Education (CTE) - $15 million for additional coaches, innovation grants, and expanding the Academy of Craft Training.
• Math and Science Teacher Matrix - $15 million
• Student Assessment - $8.4 million for the current ACAP and a new virtual testing platform.
• ALSDE Operations and Maintenance - $5.9 million.
• School Nurses - $5 million to cover increased salary and benefit costs.
• ACCESS Distance Learning - $3.5 million to expand CTE classes for the new Workforce Diploma Pathway.
• High Needs Special Education Grand Program - $3.4 million.
• Alabama Math, Science, and Technology Initiative (AMSTI) - $3 million to increase target math supports in grades 6-8.
• Jobs for Alabama Graduates (JAG) - $2.5 million to reach the governor's goal of one program in each county.
• Paid Parental Leave - $2.4 million.
• English Language Learners (ELL) - $2 million for the online platform used by ELL teachers.
• CTE Operations - $2 million.
• Computer Science for Alabama (CS4AL) - $1 million to expand teacher training and certification to meet the computer science high school graduation requirement.
• Advanced Placement (AP) - $1 million.

Update: Public Education Employees Health Insurance Program (PEEHIP) 
Mackey reported the Public Education Employees Health Insurance Program (PEEHIP) board, on which he serves, approved a FY27 budget request of $380 million to cover a projected shortfalls from hospitalization and pharmaceutical costs. PEEHIP faces more than $70 million in unanticipated additional costs in the upcoming FY26 budget. The legislature approved a 1% increase in the employer monthly contribution rate for active members in the FY26 budget, from $800 to $904, for the first time in almost a decade. The FY27 PEEHIP budget request would increase that rate school boards pay for full-time employees to $1,209.

Federal Waiver - Integrating ACT and WorkKeys for Accountability System
The SDE Accountability Work Group presented options to better measure high school preparation for post-secondary success. The U.S. Department of Education (USDOE) issued a “Dear Colleague” letter July 29, inviting state education agencies “to seek creative and effective waivers for improving student academic achievement.” Mackey said Alabama was approached to seek a waiver under the Every Student Succeeds Act (ESSA) by the new federal administration. View the USDOE letter here.

The SDE is exploring a federal waiver to add the ACT WorkKeys assessment alongside the state’s current ESSA requirement of a single summative assessment, the ACT with Writing. This would capture both college and career readiness in the state’s accountability system. The current ESSA assessment model doesn't include WorkKeys as a proficiency measure, though it counts as a College and Career Readiness Indicator (CCRI). All 11th grade students would take both assessments.

Mackey described this as "a new opportunity" that would better measure students entering the workforce immediately after high school graduation. The new Workforce Diploma Pathway, enacted in 2024, was cited as additional justification. No board action is required yet. The SDE and the USED will draft the waiver and post for public comment, a process expected to take about 6-9 months. Any changes would impact the 2027 report card and would be implemented during the 2026-27 school year.

Resolutions from SBOE Meeting

• Resolution to Modify Alabama Foundational Reading Assessment as a Precondition for Initial Certification
• Resolution in Recognition of October 13-17, 2025, as “National School Lunch Week” in Alabama Schools
• Announce Intent to Adopt Amended Alabama Administrative Code Rule 290-080-030-.05, Pertaining to School-Based Child Nutrition Program Personnel
• Alabama State Department of Education Fiscal Year 2026 Operating Budget

Next SBOE Meeting and Work Session

The board’s next regular meeting will take place Thursday, Oct. 9, 2025, at 10 a.m. in Montgomery with a work session immediately following:

• Gordon Persons Building Auditorium
• Livestream viewing: https://www.youtube.com/user/aldeptofed/live 
• Archived meeting and work session recordings: https://www.alabamaachieves.org/state-board-of-education/meeting-videos/ 

Ada Katherine van Wyhe, MPA
AASB Director of Governmental Relations