By Todd Stacy, publisher of Alabama Daily News and host of โCapitol Journalโ on APT.
Itโs that time of year again! The Alabama Legislature is back in session (the 2026 session opens Jan. 13). In election years, the session starts earlier than normal in January. That way it can end earlier and lawmakers can get back home in time to campaign. But thatโs not the only way election year sessions are different.
Traditionally, lawmakers tend not to tackle big, controversial issues in election years. You wonโt see major pushes on a gambling bill or reforms to the online sales tax, for example. You will see lawmakers focusing on the nuts and bolts of state government: the budgets. And that could get interesting.
The state has seen record-setting budgets year after year recently and that will likely remain the case this time around. But there are warning signs that the future outlook isnโt so rosy.
Warning signs
In the General Fund, which pays for non-education state agencies and programs, the state has enjoyed a massive infusion of revenue from interest earned off various state accounts. Thatโs largely due to those accounts holding billions of dollars in federal relief money, most of which has to be spent by the end of 2026. So that infusion is going away while costs are going up for state prisons, Medicaid and mental health.
In the Education Trust Fund, which pays for the range of public schools from pre-K through college, the budget remains quite healthy but expenses are adding up. The last several years have seen a series of tax cuts, which are obviously popular with voters but do result in less money for lawmakers to work with. And few could have predicted the massive demand created by the CHOOSE Act, which allows parents to use tax credits to send their children to private schools or homeschool. In the last-passed budget, lawmakers had to allocate $180 million to make sure those credits were funded. But the Legislature has budgeted conservatively in recent years so most of those issues are manageable.
The real budget problem looming is rising health care costs. Officials estimate that the Public Education Employee Health Insurance Program, which provides health care plans for teachers and other education workers, will need an additional $380 million from the Legislature to meet obligations. Even for a $10 billion budget, thatโs real money. It may not mean cuts are necessary, but it will mean there is less funding for other programs and projects requesting increases. And lawmakers will be crossing their fingers that an economic recession doesnโt set in. Though they have no way to control such an event, a recession would drastically impact state budgets by the resulting ebb in sales and income tax revenue.
It doesnโt get talked about enough, but Alabama has made some significant progress in improving education lately, especially in the younger grades. For example, the latest national report card showed Alabamaโs 4th graders rising from 40th to 32nd in Reading, and thatโs up from ranking dead last in 2019. Much of this is directly attributable to smart policies enacted by the Legislature along with funding to back it all up. I hear from lawmakers all the time that maintaining that progress is an ongoing top priority.
Regulatory and ethics reform
Two related issues you might also hear about this session are regulatory reform and ethics reform. The last few years have seen multiple scandals involving appointed boards and commissions that regulate various institutions and occupations, the latest resulting in the governor cleaning house at the Motorsports Hall of Fame Board. Many lawmakers see the need to overhaul that regulatory system and update the stateโs ethics laws to bring greater accountability and punish bad actors. The issues are complicated so it may be too heavy of a lift in an election year, but most significant legislation takes multiple years to pass.
You can follow the ins and outs of the Alabama Legislature each day by subscribing to the Alabama Daily News at aldailynews.com and each night by tuning into โCapitol Journalโ on Alabama Public Television.
Todd Stacy is the publisher of the Alabama Daily News and host of โCapitol Journalโ on Alabama Public Television.
