Goat Hill Report- Week Ending February 7, 2025

The 2025 Regular Session of the Alabama legislature began at noon on Tuesday, February 4, and later that evening Governor Kay Ivey delivered her State of the State address (details below). Most observers are not expecting one or two issues to dominate the session like last year’s session, when gambling and school choice consumed much of the session. The opening day of the session was notable because of the formal election and swearing in of Senator Garlan Gudger (R-Cullman) as the new Senate President Pro Tem. Gudger was chosen by the Senate GOP Caucus to fill the vacancy created by the resignation of Senate President Pro Tem Greg Reed (R-Jasper). After assuming his new leadership role, Gudger announced that Senator Lance Bell (R-Pell City) would assume Gudger’s former seat as Chairman of the Senate Fiscal Responsibility & Economic Development (FRED) Committee.

In terms of the legislative schedule this session, since the legislature is planning to take off two weeks in March for Spring Break (the weeks of March 10 and March 24), legislative leaders are increasing the session schedule to 3-day weeks in February – meaning the two chambers will convene on Tuesday, Wednesday and Thursday, with committee meetings scheduled around that. Typically the schedule is Tuesday and Thursday with committee meetings on Wednesday. The 2025 session is expected to conclude by mid-May.

Having completed Days 1-3 of the session (out of a maximum of 30 meeting days), the notable news items for this first week are detailed below.

State of the State

On Tuesday, marking the start of the 2025 Regular Session of the Alabama Legislature, Governor Kay Ivey delivered her State of the State address to a joint session of the legislature highlighting accomplishments and outlining her administration’s priorities for the upcoming session. On the topic of education, Governor Ivey touted successes under the CHOOSE Act, passed in the 2024 session, providing education savings accounts and also the gains made under the Literacy and Numeracy Acts. She highlighted education priorities for the 2025 legislative session as a limitation on student usage of cell phones and a bill for parental leave to support teachers and state employees. In the area of Alabama’s economy, Governor Ivey boasted “Over $55 billion dollars have been invested in our state, creating some 93,000 jobs and counting.” In the area of infrastructure, Ivey touted that the state has seen 500 road and bridge projects across every single county in the state, over 200 broadband expansion projects resulting in 142,000 more addresses to be connected to high-speed internet, and funding towards 495 water and sewer infrastructure projects statewide. In the area of workforce development, the Governor noted the establishment of the new Alabama Department of Workforce to replace the Department of Labor, with Secretary Greg Reed leading these efforts. Finally, the Governor emphasized Public Safety as a legislative priority, through supporting President Trump in securing the border and preventing crime through Speaker Nathaniel Ledbetter’s bipartisan package of bills that will “back the blue” and combat inner city gun violence. Governor Ivey also lent her support to common sense criminal justice reform like the Second Chance Act, noting that “will help us focus our taxpayer dollars on the most pressing public safety needs.”

Governor’s Budgets Introduced

The day after delivering her State of the State address, Gov. Ivey’s proposed budgets for FY2026 were introduced. Although the two budgets featured increases for Medicaid and teachers/state employees benefits (but no pay raises), Ivey’s finance team warned that growth is slowing and an economic downturn may be looming. Lawmakers are expected to take up the budgets about halfway through the session.

The Governor’s Education Trust Fund (ETF) budget proposed a record $9.9 billion in education spending, which is a $600 million increase over the current year’s education budget. Specifically, the proposed ETF budget includes: $213 million for the Department of Early Childhood Education (up from $201 million this year); $622 million for the Alabama Community College System (up from $587 million); $158 million for increases in funding retirement and health insurance increases; and $19.8 million for the newly-reorganized Department of Workforce for transitioning programs from the former Department of Labor. In addition to the FY2026 regular ETF education budget, Ivey is proposing: a supplemental ETF budget in the current fiscal year of $524 million to K-12, higher education and other agencies out of $1.8 billion in unexpected 2024 tax revenue; $1.3 billion from the Advancement and Technology Fund for K-12 and higher education; and $133 million from the Education Opportunities Reserve Fund, with $100 million distributed to K-12 school districts through a new student-based funding formula (see discussion in final report item below).

As for the General Fund (GF) budget, Gov. Ivey recommended $3.7 billion in spending – a $300 million increase over the current year. Ivey’s budget proposal focuses on public safety, education, workforce, veterans’ needs and economic development. Notable items from the Governor’s GF request include: $827 million for the Department of Corrections (up from $737 million this year); $142 million for the Alabama Law Enforcement Agency (up from $130 million); $1.2 billion for Alabama Medicaid (up from $955 million); $248 million for the Department of Mental Health (up from $238 million); and $21 million for the increase in state employees’ health insurance. While the General Fund has seen overages of nearly $870 million over the past five years, State Finance Director Bill Poole stated there will be no GF supplemental proposal for 2026.

Hot Button Social Issues Prioritized in First Week

As the political debate in Washington has been dominated by issues like immigration and gender identity, those issues emerged as priorities during the opening week of the Alabama legislative session. On Wednesday afternoon, the Senate County & Municipal Government Committee considered its first package of immigration-related bills. Most prominently, SB53 by Sen. Wes Kitchens (R-Arab) is enforcement related and creates a new crime for concealing an illegal alien. Another key bill is SB63 by Sen. Lance Bell (R-Pell City); the legislation would require fingerprinting and DNA collection of illegal aliens in custody. SB77 by Sen. April Weaver (R-Brierfield) would impose a new wire fee on all outgoing international transfers and provide that monies be deposited in an immigration enforcement fund for use by county sheriffs. Additional immigration bills are expected to be filed the House of Representatives in the coming weeks, including a proposal related to nongovernmental organizations (NGOs) operating in the state. A group of House and Senate members has been working closely with various entities, including in-state trade associations, to refine the proposals prior to introduction and/or floor activity. Regarding gender identity, the Senate prioritized another high-profile bill in the first week: SB79, also sponsored by Sen. Weaver, which is commonly referred to as the “What Is A Woman Act.” According to legislative text, the bill seeks “to bring clarity, certainty, and uniformity to the laws of Alabama regarding sex discrimination, equality of the sexes, and benefits or services specifically provided to males and men and to females and women.” SB79 quickly advanced through the Senate Health Committee and was the topic of fierce and extended floor debate on Thursday before passing by a 26-5 final vote. A companion bill by Rep. Susan DuBose (R-Hoover), who has been vocal on gender-related issues, has also been filed in the House and will continue to be a high profile topic as the session progresses.

Other Key Items Expected in Next Few Weeks

Legislative items of interest that are expected to generate considerable attention in the coming weeks include:

• Education Funding Formula – after off-season study and recommendations by a joint study commission, legislation is anticipated that will recommend revisions to Alabama’s K-12 school funding model. Based on the most recent commission meeting, it is expected that the final proposal will combine the current Foundation Program, created in 1995, with additional need-based funding for rural and high-poverty areas, among other considerations.
• Medical Cannabis Commission – State Sen. Tim Melson (R-Florence) has introduced SB72, which would make revisions to the gridlocked medical marijuana licensing authority that was created in 2022 but has been plagued with errors, lawsuits and three rounds of license selection.
• Veterans Mental Health – After quickly passing the Senate in the first week of session, the House will now take up SB70 by Sen. Andrew Jones (R-Centre) establishing a Veterans Resource Center and board of directors for transitioning veterans from military to civilian life. Particular emphasis will be placed on mental health and wellness, as well as education/career counseling.

The Alabama Legislature will reconvene on Tuesday, February 11, 2025.