Fighting crime and illegal immigration will be among the top issues in the Alabama Legislature’s more than three-month regular session that started Tuesday (Feb. 4).
Lawmakers will be tasked with passing 2026 budgets amid shrinking revenue sources. They’ll be asked to borrow money for a new prison they’d thought was funded in 2021. And they’ll have to decide whether to maintain a larger-than-expected tax cut.
Meanwhile, in the Alabama Legislature, there’s always the chance of a gambling debate.
Here’s where some of the key issues stand going into Tuesday.
Bipartisan support for crime education bills
Named the No. 1 priority this year by House Speaker Nathaniel Ledbetter, R-Rainsville, and Gov. Kay Ivey, a package of bills designed to address violent crime is expected early in the session.
Ledbetter discussed the package at an event in January, saying it would include measures to improve police recruitment and retention and plans to expand special crime suppression task forces. Ivey is expected to discuss the initiative further during her state of the state address Tuesday night.
Several Democratic lawmakers have expressed support for the initiative.
“I look forward to seeing the package that they’re going to roll out with that because where I live, crime is a big issue,” Rep. Patrice McClammy, D-Montgomery, told ADN recently. “It has gotten rough in the last 50 years. Since I’ve been in my neighborhood, we’re on the floor at night; gunshots every night, on the floor, crawling to the bathroom.”
Lt. Gov. Will Ainsworth told Alabama Daily News to help combat crime, he wants to see increased pay for prosecutors in fiscal 2026.
“What we’re paying prosecutors isn’t enough for what they’re doing,” Ainsworth told ADN while talking about legislative priorities. “If we don’t do something, we won’t have people going into the (district attorneys’ offices).”
Ainsworth also said there will be a proposed constitutional amendment to expand Aniah’s Law. Approved by Alabamians in 2022, Aniah’s Law allows judges to deny bail when a defendant is charged with specific violent crimes.
Mental health resources, with focus on veterans
Expanding mental health resources, especially for veterans, will continue to be a priority, according to Ledbetter and Sen. Garlan Gudger, whom Republicans have selected to lead the Senate as president pro tem.
A new Veteran Mental Health Steering Committee has been working on recommendations since last August.
That committee has floated ideas of expanding care for those with traumatic brain injuries, which is more common among veterans and has shown an increased association with alcohol and substance abuse, and introducing programs for veterans to voluntarily surrender their firearms, temporarily, in times of crises.
Ledbetter was unsure whether lawmakers would take up efforts to expand the state’s 988 crisis line, which has remained overwhelmed with calls since its launch in 2022. He did vow that work on expanding mental health resources would continue “long term,” and that this year, legislation expanding mental health resources for veterans was likely.
Expanding veteran treatment courts to all 67 counties is also expected to be among the legislation proposed by the Alabama Military Stability Commission chaired by Ainsworth.
“Our goal is to continue to make us the most military and veteran-friendly state in the country,” Ainsworth said.
Other bills in that expected military package include a property tax exemption for disabled veterans and exempting more deployment pay from some state taxes.
“Right now, we’re the No. 2 state for veterans to retire in,” Ainsworth said. “The No. 1 state is Florida. A big part of that is the tax burden and tax policy of a state, and so we want to continue to make sure we take care of our veterans.”
Borrowing for prison construction
Sen. Greg Albritton, R-Range, said he will sponsor a bill to allow the state to borrow up to an additional $500 million to finish the prison construction projects first approved in 2021.
“We need to increase our bonding amount so we can take the prison matter off the table,” Albritton, the Senate General Fund committee chairman, told ADN on Thursday.
In 2021, lawmakers and Ivey approved a plan to dedicate $1.2 billion to the construction of two 4,000-bed men’s prisons in Elmore and Escambia counties. The Elmore site started first and design changes and inflation greatly increased its cost, eating up nearly all the dedicated money.
State officials moved forward last fall with design work on the Escambia site, but recently said they have about 60% of the needed funds for that prison.
The Escambia County prison is in Albritton’s district, as are two outdated facilities, and he’s been a staunch advocate to find the needed money. Other legislative leaders and Ivey have remained committed to the construction.
Albritton also said borrowing the additional money will allow for some prison upgrades outlined in the 2021 bill.
“It allows for proper planning,” he said.
The state has already borrowed about $500 million for prison construction. Another $400 million came from American Rescue Plan Act money given to the state to make up for tax revenue it lost during the pandemic.
Targeting illegal immigration
Members of the Legislature were talking last year about what the state could do to counter illegal immigration, expressing frustration about what they said was a lack of action by the Biden administration. Now, President Donald Trump is in the White House and has taken in his first weeks some swift action to remove illegal immigrants with criminal records from the country.
A package of bills is expected a bit later in the session to complement in Alabama the federal policies.
Lawmakers’ proposals are expected to include increasing the penalties for forged documents, increasing the fees for money wires out of the country — people could recoup the fees when they file their state tax returns — and putting more enforcement on an existing law requiring businesses in Alabama to participate in the federal E-Verify program.
Budgets
After record budgets in recent years and a pandemic-related influx of federal money, the revenue growth in the funds that fuel state spending has slowed.
In the first three months of fiscal 2025, growth in the Education Trust Fund is flat. Real growth in the General Fund is about 3%. While not overly concerning — conservative budget leaders for years have planned to spend less than they have and built reserves — the recent spending spree is over in 2026, they say.
Sen. Arthur Orr, who chairs the Senate’s education budget committee and is on the General Fund budget committee, said the fiscal situation will be “a new phenomenon” for some of the newer members of the Legislature who entered office amid the boom created by increased federal spending on COVID-19 relief.
“On the General Fund side, they’re not going to have much flexibility at all,” Orr told ADN. “On the education side, we’re reverting back to the norm. That means the excesses that we’ve seen the past few years are not going to be there.”
The 2025 education budget is $9.3 billion; the General Fund is $3.3 billion.
There are some significant, likely unavoidable, budget increases on the horizon.
Medicaid, always the largest General Fund expense, is expected to need a significant increase in 2026.
The Public Education Employees’ Health Insurance Plan Board is trying to plug a projected 2027 budget shortfall of between $263 million and $319 million due to federal policy changes. The board voted last year to ask lawmakers for a 2026 budget request of about $1.3 billion, an additional $134 million over the current fiscal year.
Separately, the Retirement Systems of Alabama will be asking lawmakers for more state funding in 2026 because of an increase in unfunded liabilities. For the Teachers’ Retirement System, RSA is requesting an employer contribution of $1.3 billion in 2026, a $114.9 million increase. Of that total, an estimated $777.6 million would come from the ETF monies; the rest from federal, local, other state funds, non-governmental funds, or tuition.
For the Employees’ Retirement System, RSA is requesting $342.6 million in 2026, a $23.5 million increase. About $84.9 million of that would come from General Fund money. The rest would be paid by participating employers from other state, local or federal funds.
“Expenses and costs have gone up as revenue has gone down, we’re back to having to make choices on how we spend our money and we don’t have the ability to accommodate everybody and all the demand out there,” Orr said.
Both the ETF and General Fund do have excess revenue left over from 2024, though less than in the last two years. This will allow for a supplemental spending bill for education, money lawmakers can allocate outside of the normal budget. But for the General Fund, Albritton said he’s not recommending a supplemental.
“I think whatever funds we have in excess are going to be eaten up by the demands of the upcoming (General Fund) budget.”
Education funding formula
Meanwhile, proposed changes to how the state distributes K-12 education funding could begin in the 2026 budget, increasing expenses, Orr said.
A legislative commission has been reviewing whether the state should put more financial resources toward educating students with more costly challenges, such as those with disabilities or living in poverty. While most states have moved to needs-based funding formulas, Alabama still uses a system based solely on student headcount without accounting for challenges.
“It certainly appears the way the wind is blowing, among at least the appropriations committee members, is a gravitation towards the hybrid model, and that’s going to mean increased funding demands to fill the particular targeted populations in the school systems that we’ve targeted,” Orr said.
Orr and Rep. Danny Garrett, R-Trussville, led the commission, composed of education budget committee members from both chambers, in studying the potential benefits of weighted student funding.
Moving to a whole new funding formula is too much of an unknown, commissioners said. Instead, commissioners agreed, the state should continue with the current system but target more funding toward student needs. Revenue officials assured lawmakers the state has sufficient funds to make the shift.
Overtime tax decision
In 2023, lawmakers and Gov. Kay Ivey inadvertently gave some Alabamians a much larger tax break than they intended. Now, the Legislature and governor must decide if people get to keep it beyond June.
The temporary elimination of state income tax on hourly workers’ overtime earnings was widely supported two years ago. But since it went into effect last year, officials have learned that more people than expected work overtime hours in Alabama.
The tax cut’s impact on income tax collections, which flow into the Education Trust Fund, was an estimated $231 million from January through September of last year. That’s nearly $200 million more than it was expected to be for an entire year.
But House Minority Leader Anthony Daniels, D-Huntsville, who sponsored the tax cut has said that’s not a bad thing. Hourly workers are getting to keep, and spend, more of their earnings, generating tax revenue in other areas, he’s said. He plans to bring a bill making the cut permanent.
Others, including Orr, have said that if the state is going to commit to a major tax cut, there are others to consider, including possibly dropping another percentage off of the state’s sales tax on groceries.
On gambling, House not betting on a comeback
Legislation to expand legal gambling in Alabama dominated the Alabama State House last year. And while the two-bill package ultimately died in the Senate after moving through the House, interest in a proposal as a new revenue stream for the state and a chance for Alabamians to vote on a lottery persists.
Asked whether gambling may come up in this year’s session, Ledbetter had a straightforward message.
“Ask the Senate,” he told ADN. “We’re not messing with it, it’s going to have to come from them.”
Albritton carried the 2024 legislation in the Senate, but ultimately voted against the slimmed-down version presented on the Senate floor.
National politics pour cold water on Medicaid expansion this year
Despite significant momentum last year, the proposal for Alabama to expand its Medicaid program has lost steam going into 2025, in large part due to President Donald Trump’s administration casting doubt on its feasibility, Alabama lawmakers say.
While a top priority of Alabama Democratic lawmakers for years, Republican lawmakers have largely dismissed the idea as being too costly to the state, as has Gov. Kay Ivey. Ledbetter, however, first floated the idea of public-private partnership to expand coverage in January of 2024, and several other Republican lawmakers later became open to the idea of expansion.
However, after Trump’s victory in November, Ledbetter told Alabama Daily News in January that it was doubtful that Medicaid expansion would come to fruition, citing both the new White House administration and Ivey’s continued skepticism.
“I think as far as the (Medicaid) expansion, I don’t see anything coming,” Ledbetter said.
Alabama House Democrats’ 2025 policy agenda, unveiled on Tuesday, did include calls to continue to advocate for Medicaid expansion. However, when asked of the feasibility of expansion, Daniels told ADN that Trump’s agenda brought uncertainty to the health care landscape.
Alabama Daily News’ Trisha Powell Crain contributed to this report.
EDITOR’S NOTE — This story was written by Mary Sell and Alexander Willis with contributions from Trisha Powell Crain and originally published by Alabama Daily News. It is reprinted with permission.
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