PROJECTAlabama

State Fiscal Briefs

May 2022

Looking for Alabama data related to the pandemic? We have health, economic, and fiscal data on our new tool, How the COVID-19 Pandemic is Transforming State Budgets.

Alabama’s budget basics

According to the National Association of State Budget Officers (NASBO), Alabama’s total expenditures in fiscal year (FY) 2021 were $31.7 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2021 were $2.7 trillion, ranging from $4.7 billion in Wyoming to $512.8 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Alabama’s combined state and local direct general expenditures were $43.0 billion in FY 2019 (the most recent year census data were available), or $8,768 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $10,161.

Alabama’s largest spending areas per capita were elementary and secondary education ($1,667) and public welfare ($1,620). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Alabama’s combined state and local general revenues were $43.9 billion in FY 2019, or $8,937 per capita. National per capita general revenues were $10,563. Alabama uses all major state and local taxes. After federal transfers, Alabama’s largest sources of per capita revenue were charges ($2,244), such as state university tuition and highway tolls, and general sales taxes ($1,123).

Alabama’s politics

Governor Kay Ivey, a Republican, was elected in 2018 with 59 percent of the vote. The next gubernatorial election is in 2022.

Republicans control both the House of Representatives (77 Republicans to 28 Democrats) and Senate (27 Republicans to 8 Democrats), with veto-proof majorities in both houses. Control of the governor’s mansion and each house of the legislature gives Republicans a trifecta in Alabama. The entire legislature is up for election in 2022 because both representatives and senators serve four-year terms.

Alabama’s budget institutions, rules, and constraints

Alabama uses an annual budget. The legislature must pass a balanced budget and is prohibited from carrying a deficit into the following year. There are no further tax and expenditure limits. Alabama does limit its total authorized debt (but not debt service).

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Alabama’s current budget

Governor Kay Ivey released her FY 2023 budget proposal and gave her state of the state address in January 2022.

Alabama enacted its FY2022 budget in May 2021. The enacted budget included $7.7 billion in Education Trust Fund spending and $2.5 billion in general fund spending. (Alabama and Utah are the only states with separate education and general fund budgets. NASBO combined the two under “general fund spending” when describing Alabama’s recent expenditure totals.) According to the governor, Education Trust Fund spending increased by 6.3 percent and general fund spending increased by 3.8 percent over the previously enacted budget.

Under the American Rescue Plan, Alabama will receive $2.1 billion in direct state fiscal aid and $1.4 billion in local government aid from the federal government. As of January 2022, Alabama had spent part of its state ARP funds on public safety and public health programs.

According to NASBO, Alabama’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

  • FY 2021: $9.4 billion/$31.7 billion

  • FY 2020: $10.2 billion/$31.6 billion

  • FY 2019: $9.0 billion/$28.9 billion

For more on Alabama’s budget, see