Historical Alabama budget and finance information

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The historical Alabama budget and finance information below applies to years prior to the most current fiscal year. With the exception of the tab labeled "Prior fiscal year budgets," the tabs below display information, from several different fiscal years, as it was presented on Ballotpedia in prior calendar years. For more current information regarding Alabama's budget and finances, click here.

As published 2016

Alabama budget and finances

General information

Budget calendar: Annual

Fiscal year: 2016

State credit rating: AA (as of 2014)

Current governor: Robert J. Bentley

Financial figures

Total spending (state and federal funds): $24.5 billion (estimated for 2015)

Per capita spending: $5,051.68 (estimated for 2015)

Total state tax collections: $9.3 billion (2014)

Per capita tax collections: $1917.66 (2014)

State debt: $68.3 billion (2012)

Per capita state debt: $14,173 (2012)

State budget and finance pages • Total state expenditures • State debt • Tax policy in Alabama

In Alabama, as in other states, lawmakers and public officials are elected in part to manage the state's finances. This includes generating revenues (money coming into the state from various sources) and approving expenditures (the money spent on governmental functions and servicing state debt). State budgets are complex and fluid, as they depend on anticipated revenues and planned expenditures, which may alter over the course of a fiscal year. If revenues do not keep pace with expenditures, states generally have to raise taxes, cut services, borrow money, or a combination of the three. State budget decisions are also influenced by policy decisions at the national level, such as the Affordable Care Act or energy and environmental regulations, and issues at the local level, such as crime and the quality of education.

HIGHLIGHTS

Between fiscal years 2014 and 2015, total government spending in Alabama decreased by approximately $31 million—from $24.57 billion in fiscal year 2014 to an estimated $24.55 in 2015. This represents a 0.13-percent decrease.

In Alabama in fiscal year 2014, 52 percent of total tax revenues came from sales taxes and gross receipts. Income taxes accounted for 39 percent of total state tax collections.

Education accounted for almost 42 percent of state expenditures in fiscal year 2015, while 32 percent went to Medicaid.

The Alabama state budget and financial data presented here come from different years because the states and the federal government report and publish the information at different times.

Definitions

The following terms are used to describe a state's finances:

• Revenues come mainly from tax collections, licensing fees, federal aid, and returns on investments.
• Expenditures generally include spending on government salaries, infrastructure, education, public pensions, public assistance, corrections, Medicaid, and transportation.
• State debt refers to the money borrowed to make up for a deficit when revenues do not cover spending.
• The state credit rating is the grade given by a credit rating agency based on the general financial health of the state's government and economy.
• State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."
• Federal funds are "funds received directly from the federal government."
• Total spending is calculated by adding together the totals for state and federal funds used for expenditures.

Note: In comparing dollar amounts across the states, it is important to note that the cost of living can from state to state and within a state. The amounts given on this page have not been adjusted to reflect these differences. For more information on "regional price disparities" and the Consumer Price Index, see the U.S. Department of Commerce, Bureau of Economic Analysis.

Revenues

2014 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2014 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "2013 population" and "Per capita collections" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "2013 population" and "Per capita collections" have not been abbreviated.

Compared to neighboring states, Alabama had the second highest state tax collections per capita in fiscal year 2014 at $1,918.

State tax collections by source ($ in thousands), 2014
State	Property taxes	Sales and gross receipts	Licenses	Income taxes	Other taxes	Total	2013 population	Per capita collections
Alabama	$329,598	$4,812,674	$386,378	$3,612,991	$152,113	$9,293,754	4,846,411	$1,918
Florida	$250	$29,046,930	$2,133,240	$2,043,750	$2,160,180	$35,384,350	19,905,569	$1,778
Georgia	$788,350	$7,310,132	$609,944	$9,909,378	$10,698	$18,628,502	10,097,132	$1,845
Mississippi	$25,103	$4,704,955	$559,218	$2,193,646	$91,593	$7,574,515	2,993,443	$2,530
Tennessee	N/A	$8,758,085	$1,335,392	$1,416,190	$296,662	$11,806,329	6,547,779	$1,803
United States	$14,232,835	$411,414,175	$51,120,024	$357,104,785	$31,880,270	$865,752,089	318,907,401	$2,715
Source: U.S. Census Bureau, "2014 annual survey of state government tax collections by category," accessed April 4, 2016

Alabama tax collections by source in 2014.
Source: U.S. Census Bureau

The table below lists 2014 tax collections by source as percentages of total collections. About 51.8 percent of Alabama's total state tax collections came from "sales and gross receipts".

State tax collections by source (as percentages), 2014
State	Property taxes	Sales and gross receipts	Licenses	Income taxes	Other taxes
Alabama	3.5%	51.8%	4.2%	38.9%	1.6%
Florida	0.0%	82.1%	6.0%	5.8%	6.1%
Georgia	4.2%	39.2%	3.3%	53.2%	0.1%
Mississippi	0.3%	62.1%	7.4%	29.0%	1.2%
Tennessee	N/A	74.2%	11.3%	12.0%	2.5%
Source: U.S. Census Bureau, "2014 annual survey of state government tax collections by category," accessed April 4, 2016

Federal aid to the state budget

See also: Federal aid to state budgets

State governments receive aid from the federal government to fund a variety of joint programs, mainly in the form of grants for such things as Medicaid, education, and transportation. In 2013 federal aid to the states accounted for roughly 30 percent of all state general revenues. Federal aid varies from state to state. For example, Mississippi received approximately $7.5 billion in federal aid in 2013, accounting for about 43 percent of the state's general revenues, the highest percentage of all of the states. By contrast, North Dakota received about $1.5 billion in federal aid in 2013, or just 19 percent of the state's general revenues, the lowest percentage in the nation.

The table below notes what share of Alabama’s general revenues came from the federal government in 2013. That year, Alabama received approximately $8.2 billion in federal aid, 36.2 percent of the state's general revenues. Taking into consideration the state's 2013 population, this came out to about $1,702 in federal aid per capita. Figures from surrounding states are provided for additional context.

Federal aid to state budgets, 2013
State	Total federal aid ($ in thousands)	Federal aid as a % of general revenues	Ranking (by % of general revenues)	Est. 2013 population	Aid per capita
Alabama	$8,226,967	36.2%	9	4,833,722	$1,702
Florida	$23,506,254	31.5%	28	19,552,860	$1,202
Georgia	$14,323,163	37.3%	7	9,992,167	$1,433
Mississippi	$7,509,589	42.9%	1	2,991,207	$2,511
Tennessee	$10,819,977	39.5%	3	6,495,978	$1,666
Sources: United States Census Bureau, "State Government Finances: 2013," accessed April 4, 2016 United States Census Bureau, "State totals: Vintage 2013," accessed April 8, 2016 Note: Per-capita figures were generated by Ballotpedia by dividing total federal aid for the state by the estimated population of that state in 2013.

Spending

Estimated 2015 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2015 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and “Per capita spending" have not been abbreviated.

Alabama's total estimated government spending in fiscal year 2015 was $24.5 billion, which was the second lowest amount when compared to surrounding states.

Total estimated state spending, FY 2015 ($ in millions)
State	State funds	Federal funds	Total spending	Population	Per capita spending
Alabama	$14,990	$9,556	$24,546	4,858,979	$5,051.68
Florida	$50,003	$25,492	$75,495	20,271,272	$3,724.24
Georgia	$30,593	$12,901	$43,494	10,214,860	$4,257.91
Mississippi	$11,481	$8,953	$20,434	2,992,333	$6,828.79
Tennessee	$18,806	$13,156	$31,962	6,600,299	$4,842.51
Per-capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census Bureau estimates. Source: National Association of State Budget Officers, "Examining fiscal 2013-2015 state spending," accessed April 4, 2016

Spending by function

Breakdown of spending by function in FY 2014.
Source: National Association of State Budget Officers

See also: State spending by function as a percent of total expenditures

State spending in Alabama can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2014 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percentages, indicating the share of the total budget spent per category.

In fiscal year 2014, higher education accounted for 20.6 percent of Alabama's total expenditures.

State spending by function as a percent of total expenditures, FY 2014
State	K-12 education	Higher education	Public assistance	Medicaid	Corrections	Transportation	Other
Alabama	20.5%	20.6%	0.2%	23.3%	2.4%	6.4%	26.6%
Florida	19.2%	7.0%	0.3%	32.0%	3.8%	12.1%	25.6%
Georgia	24.3%	18.8%	0.1%	21.6%	3.6%	5.9%	25.7%
Mississippi	16.3%	18.9%	5.5%	24.6%	2.0%	7.1%	25.5%
Tennessee	18.3%	14.2%	0.3%	30.6%	3.1%	5.7%	27.8%
Source: National Association of State Budget Officers Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."

Spending trends

Between 2010 and 2014, the share of the Alabama state budget spent on K-12 education dropped from 24.3 percent in 2010 to 20.5 percent in 2014. See the table below for further details (figures are rendered as percentages, indicating the share of the total budget spent per category).

Spending by function from 2010 to 2014 (as percentages)
Year	K-12 education	Higher education	Public assistance	Medicaid	Corrections	Transportation	Other
2014	20.5%	20.6%	0.2%	23.3%	2.4%	6.4%	26.6%
2013	20.4%	19.9%	0.2%	22.8%	2.4%	6.5%	27.7%
2012	20.9%	20.1%	0.2%	23.3%	2.5%	6.1%	27.0%
2011	24.9%	22.5%	0.3%	24.9%	2.9%	6.9%	17.7%
2010	24.3%	21.4%	0.2%	25.8%	2.9%	8.2%	17.1%
Source: National Association of State Budget Officers Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."

Fiscal year budgets

See also: Historical Alabama budget and finance information

Fiscal year 2016

Governor Robert Bentley signed Alabama's fiscal year 2016 budget on September 17, 2015. This signing ended a budget stalemate only two weeks before the fiscal year was to begin (October 1, 2015). The budget cut general fund spending by about 4.5 percent from the previous year. Medicaid, prison, mental health, human resources and state court system spending remained about equal to spending in fiscal year 2015, but many other programs and agencies saw cuts of about 5.5 percent. These cuts were made in order to prevent tax increases. Governor Bentley sought to avoid program cuts through increases in taxes, but was met with opposition in the legislature.

Additionally, the new budget moved about $80 million in tax revenue from the state's education trust fund to the general fund. New taxes on pharmaceuticals and nursing homes were also created to increase revenue for Medicaid.

State debt

See also: State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Alabama had a state debt of approximately $68.3 billion in 2012. Its state debt per capita was $14,173. In this report state debt was calculated based on four components: "market-valued unfunded public pension liabilities, outstanding government debt, unfunded other post employment benefit (OPEB) liabilities, and outstanding unemployment trust fund loans." In this report for fiscal year 2012, state debt was calculated based on four components: "market-valued unfunded public pension liabilities, outstanding government debt, unfunded other post employment benefit (OPEB) liabilities, and outstanding unemployment trust fund loans." The report revealed that altogether state governments faced a combined $5.1 trillion in debt, which amounted to $16,178 per capita in the nation.

Total 2012 state debt
State	Total state debt	State debt per capita	Per capita debt ranking
Alabama	$68,343,597,000	$14,173	26
Florida	$197,871,611,000	$10,243	43
Georgia	$115,193,862,000	$11,612	39
Mississippi	$54,686,815,000	$18,321	14
Tennessee	$41,049,738,000	$6,358	50
Sources: State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014

Taxpayer burden

TIA Methodology: To figure a state’s taxpayer burden or surplus, TIA looked at a state’s total reported assets minus capital assets and assets restricted by law (buildings, roads, land, etc.) to calculate “available assets,” which were then compared to the amount of money the state owes in bills, including retirement obligations such as pension plans and healthcare benefits for retirees. If the difference between available assets and total bills was positive, TIA called this a surplus; if it was negative, this was a burden. This amount was then divided by the number of individual tax returns with a positive tax liability, thus expressing the total state surplus or burden on a per-taxpayer basis.

According to a report released in September 2015 by the nonprofit Truth in Accounting (TIA), Alabama ranked 15th worst in the country in “taxpayer burden.” Rather than using per capita state debt, TIA ranked states based on what it called a “taxpayer burden,” a term that reflects “the amount each taxpayer would have to send to their state’s treasury in order for the state to be debt-free.” On the other hand, states that had sufficient resources to pay their bills were said to have a “taxpayer surplus,” which represents the amount that each taxpayer would receive if the state were to disburse its excess funds.

Based on analysis of Alabama's Comprehensive Annual Financial Report from September 30, 2014 and actuarial reports for the state’s retirement plans, TIA concluded that $17.4 billion in promised retirement benefits were unfunded, but only $1 billion of these liabilities were reported on Alabama’s balance sheet. With all of the unfunded retirement benefits included in the total debt, the state had a shortfall of $17.1 billion, or a taxpayer burden of $13,400.

Public pensions

See also: Alabama public pensions and Alabama public employee salaries

Between fiscal years 2008 and 2012, the funded ratio of Alabama's state-administered pension plans decreased from 77 percent to 66.2 percent. The state paid 100 percent of its annual required contribution, and as of fiscal year 2012, the pension system's unfunded actuarial accrued liability totaled $14.3 billion. This amounted to $3,051 in unfunded liabilities per capita.

Credit ratings

See also: State credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This in turn results in lower interest costs, thereby lowering the cost to taxpayers.

The table below lists the Standard and Poor's credit ratings for Alabama and surrounding states from 2004 to 2014. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest.

State credit ratings, 2004 to 2014
State	2014	2013	2012	2011	2010	2009	2008	2007	2006	2005	2004
Alabama	AA	AA	AA	AA	AA	AA	AA	AA	AA	AA	AA
Florida	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AA+
Georgia	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AAA
Mississippi	AA	AA	AA	AA	AA	AA	AA	AA	AA	AA	AA
Tennessee	AA+	AA+	AA+	AA+	AA+	AA+	AA+	AA+	AA+	AA	AA
Source: Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014

Economic indicators

See also: Economic indicators by state

Alabama's GDP increased by 0.7 percent in 2014. Click the image to view a larger version.

Broadly defined, a healthy economy is typically one that has a "stable and strong rate of economic growth" (gross state product, in this case) and low unemployment, among many other factors. The economic health of a state can significantly affect its healthcare costs, insurance coverage, access to care, and citizens' physical and mental health. For instance, during economic downturns, employers may reduce insurance coverage for employees, while those who are laid off may lose coverage altogether. Individuals also tend to spend less on non-urgent care or postpone visits to the doctor when times are hard. These changes in turn may affect the decisions made by policymakers as they react to shifts in the industry. Additionally, a person's socioeconomic status has profound effects on their access to care and the quality of care received.

In September 2014, Alabama had the lowest unemployment rate among its neighboring states, at 6.6 percent. This was higher than the national unemployment rate, however. The greatest portion of its population earned annual incomes between 200 and 399 percent of the federal poverty level, with a median annual household income of $43,330.

Note: Gross state product (GSP) on its own is not necessarily an indicator of economic health; GSP may also be influenced by state population size. Many factors must be looked at together to assess state economic health.

Various economic indicators by state
State	Distribution of population by FPL* (2013)				Median annual income (2011-2013)	Unemployment rate		Total GSP (2013)†
	Under 100%	100-199%	200-399%	400%+		Sept. 2013	Sept. 2014
Alabama	17%	22%	33%	28%	$43,330	6.4%	6.6%	$193,566
Georgia	16%	21%	32%	31%	$47,753	8%	7.9%	$454,532
Mississippi	23%	20%	29%	28%	$40,338	8.4%	7.7%	$105,163
Tennessee	18%	20%	34%	28%	$42,785	8.2%	7.3%	$287,633
United States	15%	19%	30%	36%	$52,047	7.2%	5.9%	$16,701,415
* Federal Poverty Level. "The U.S. Census Bureau's poverty threshold for a family with two adults and one child was $18,751 in 2013. This is the official measurement of poverty used by the Federal Government." † In millions of current dollars. "Gross State Product is a measurement of a state's output; it is the sum of value added from all industries in the state." Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

Budget process

State documents and agenciesBelow are links to official Alabama budget and financial documents. The first is the state's Comprehensive Annual Financial Report (CAFR). A CAFR is a detailed presentation of a government entity's financial condition. This includes fiscal activities and balances for a fiscal year. The second link is to the state's relevant budget agency or office. Alabama CAFR Alabama budget agency

The state operates on an annual budget cycle. Alabama's fiscal year runs from October 1 and ends September 30 of the following year. The sequence of key events in the budget process is as follows:

1. In September of the year preceding the start of the new fiscal year, budget instructions are sent to state agencies.
2. In November, agencies submit their budget requests to the governor.
3. By the second legislative day of each regular session of the legislature, the governor must submit his or her proposed budget to the state legislature. These dates vary from session to session, occurring as early as January and as late as March.
4. The legislature adopts a budget between February and May. It must pass with a simple majority.

The governor is required to submit a balanced budget to the legislature. In turn, the legislature must pass a balanced budget.

Alabama is one of 44 states in which the governor has line item veto authority.

Agencies, offices, and committees

There are five major standing committees in the Alabama State Legislature that deal with budget and finance matters:

1. Senate Finance and Taxation Education Committee
2. Senate Finance and Taxation General Fund Committee
3. House Ways and Means Education Committee
4. House Ways and Means General Fund Committee
5. Joint Finances and Budget Committee
6. Ways and Means Education Committee, Alabama House of Representatives
7. Ways and Means General Fund Committee, Alabama House of Representatives

The duties of the Alabama State Auditor include auditing the records of the Alabama Treasurer and reporting the findings to the governor. The auditor is elected during federal midterm election years.

The Alabama Treasurer is the state's chief financial officer. The treasurer is also elected during federal midterm election years.

Transparency

See also: "Following the Money" report, 2015

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in March 2015. The report, entitled "Following the Money," measured how transparent and accountable state websites were with regard to state government spending. According to the report, Alabama received a grade of D and a numerical score of 55, indicating that Alabama was "Lagging" in terms of transparency regarding state spending.

As published 2015

State finances in the U.S.
State tax policy in the U.S.
Pension Policy
State finances on the ballot Taxes on the ballot Glossary of state budget terms Public pensions

The information on this tab contains: Spending (fiscal years 2013 and 2014) Revenues (fiscal year 2013) State debt (fiscal year 2012) Federal aid to the state budget (fiscal year 2012) Budget process

Between fiscal years 2013 and 2014, total government spending in Alabama decreased by approximately $200 million, from $24.1 billion in fiscal year 2013 to an estimated $23.9 billion in 2014. This represents a 0.9 percent decrease. The cumulative rate of inflation during the same period was 1.58 percent, calculated using the Consumer Price Indices for January 2013 and January 2014. As of 2014, financial services firm Standard and Poor's had assigned Alabama a credit rating of AA.

HIGHLIGHTS

In fiscal year 2014, total estimated spending in Alabama amounted to $23.9 billion.

In 2012 federal aid contributed to 36.5 percent of the state's general revenue, the ninth-highest percentage in the nation.

Spending

Definitions

The following terms are used to describe a state's finances:

• Revenues come mainly from tax collections, licensing fees, federal aid, and returns on investments.
• Expenditures generally include spending on government salaries, infrastructure, education, public pensions, public assistance, corrections, Medicaid, and transportation.
• State debt refers to the money borrowed to make up for a deficit when revenues do not cover spending.
• The state credit rating is the grade given by a credit rating agency based on the general financial health of the state's government and economy.
• State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."
• Federal funds are "funds received directly from the federal government."
• Total spending is calculated by adding together the totals for state and federal funds used for expenditures.

2014 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2014 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and "Per capita spending" have not been abbreviated.

Total estimated spending in Alabama was $23.9 billion, second-lowest among its neighboring states. Alabama's estimated per capita spending was $4,927.

Total estimated state spending, FY 2014 ($ in millions)
State	State funds	Federal funds	Total spending	Population	Per capita spending
Alabama	$14,605	$9,288	$23,893	4,849,377	$4,927.02
Florida	$48,135	$25,416	$73,551	19,893,297	$3,697.28
Georgia	$29,545	$11,834	$41,379	10,097,343	$4,098.01
Mississippi	$10,479	$8,197	$18,676	2,994,079	$6,237.64
Tennessee	$18,832	$13,231	$32,063	6,549,352	$4,895.60
Per-capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census Bureau estimates. Source: National Association of State Budget Officers

Spending by function

See also: State spending by function as a percent of total expenditures

Breakdown of spending by function in FY 2013.
Source: National Association of State Budget Officers

State spending in Alabama can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2013 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percentages, indicating the share of the total budget spent per category.

In 2013 Alabama dedicated the largest portion of its budget to Medicaid at 22.8 percent. The state also dedicated a larger share of its budget on higher education (19.9 percent) than any of its neighboring states.

State spending by function as a percent of total expenditures, FY 2013
State	K-12 education	Higher education	Public assistance	Medicaid	Corrections	Trans- portation	Other
Alabama	20.4%	19.9%	0.2%	22.8%	2.4%	6.5%	27.7%
Florida	19.3%	8.5%	0.3%	31.8%	3.9%	10.9%	25.4%
Georgia	24.1%	19%	0.1%	21.3%	3.7%	5.7%	26.2%
Mississippi	16.4%	16.1%	5.9%	26.1%	2%	6.7%	26.7%
Tennessee	17.8%	13.9%	0.4%	30.8%	2.8%	6.1%	28.2%
Source: National Association of State Budget Officers Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."

Spending trends

From 2009 to 2013, the portion of the Alabama state budget dedicated to K-12 education decreased from 25 percent to 20.4 percent. Decreases can also be seen in the portions dedicated to Medicaid and corrections. See the table below for further details (figures are rendered as percentages, indicating the share of the total budget spent per category).

Spending by function from 2009 to 2013 (as percentages)
Year	K-12 education	Higher education	Public assistance	Medicaid	Corrections	Transportation	Other
2013	20.4%	19.9%	0.2%	22.8%	2.4%	6.5%	27.7%
2012	20.9%	20.1%	0.2%	23.3%	2.5%	6.1%	27.0%
2011	24.9%	22.5%	0.3%	24.9%	2.9%	6.9%	17.7%
2010	24.3%	21.4%	0.2%	25.8%	2.9%	8.2%	17.1%
2009	25.0%	20.7%	0.2%	25.5%	2.9%	6.5%	19.2%
Source: National Association of State Budget Officers Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."

Revenues

2013 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "Population" and "Per capita revenue" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "Population" and "Per capita revenue" have not been abbreviated.

In 2013 state tax collections in Alabama totaled $9.3 billion. Per capita tax collections in Alabama totaled $1,917.

State tax collections by source ($ in thousands)
State	Property taxes	Sales and gross receipts	Licenses	Individual income taxes	Corporation net income taxes	Other taxes	Total	2013 population	Per capita collections
Alabama	$322,300	$4,707,375	$490,475	$3,202,520	$382,202	$161,597	$9,266,469	4,833,996	$1,916.94
Florida	$360	$28,526,653	$1,993,965	N/A	$2,071,710	$1,995,790	$34,588,478	19,600,311	$1,764.69
Georgia	$61,052	$7,408,422	$744,401	$8,772,227	$797,255	$10,795	$17,794,152	9,994,759	$1,780.35
Mississippi	$24,122	$4,571,294	$530,010	$1,755,424	$415,980	$105,895	$7,402,725	2,992,206	$2,474.00
Tennessee	N/A	$9,128,175	$1,421,174	$262,842	$1,256,173	$298,527	$12,366,891	6,497,269	$1,903.40
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014

Alabama tax collections by source in 2013.
Source: Tax Policy Center

The table below lists 2013 tax collections by source as percentages of total collections. Most of Alabama's revenue was generated by sales taxes and gross receipts, which accounted for 50.8 percent of total collections. Individual income tax collections accounted for 34.6 percent of total collections.

State tax collections by source (as percentages)
State	Property taxes	Sales and gross receipts	Licenses	Individual income taxes	Corporation net income taxes	Other taxes
Alabama	3.48%	50.80%	5.29%	34.56%	4.12%	1.74%
Florida	0.00%	82.47%	5.76%	N/A	5.99%	5.77%
Georgia	0.34%	41.63%	4.18%	49.30%	4.48%	0.06%
Mississippi	0.33%	61.75%	7.16%	23.71%	5.62%	1.43%
Tennessee	N/A	73.81%	11.49%	2.13%	10.16%	2.41%
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014

State debt

See also: State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Alabama had a state debt of approximately $68.3 billion in 2012. Its state debt per capita was $14,173. In this report state debt was calculated based on four components: "market-valued unfunded public pension liabilities, outstanding government debt, unfunded other post employment benefit (OPEB) liabilities, and outstanding unemployment trust fund loans." In this report for fiscal year 2012, state debt was calculated based on four components: "market-valued unfunded public pension liabilities, outstanding government debt, unfunded other post employment benefit (OPEB) liabilities, and outstanding unemployment trust fund loans." The report revealed that altogether state governments faced a combined $5.1 trillion in debt, which amounted to $16,178 per capita in the nation.

Total 2012 state debt
State	Total state debt	State debt per capita	Per capita debt ranking
Alabama	$68,343,597,000	$14,173	26
Florida	$197,871,611,000	$10,243	43
Georgia	$115,193,862,000	$11,612	39
Mississippi	$54,686,815,000	$18,321	14
Tennessee	$41,049,738,000	$6,358	50
Sources: State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014

Public pensions

See also: Alabama public pensions and Alabama public employee salaries

Between fiscal years 2008 and 2012, the funded ratio of Alabama's state-administered pension plans decreased from 77 percent to 66.2 percent. The state paid 100 percent of its annual required contribution, and as of fiscal year 2012, the pension system's unfunded actuarial accrued liability totaled $14.3 billion. This amounted to $3,051 in unfunded liabilities per capita.

Credit ratings

See also: State credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This in turn results in lower interest costs, thereby lowering the cost to taxpayers.

The table below lists the Standard and Poor's credit ratings for Alabama and surrounding states from 2004 to 2014. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest.

State credit ratings, 2004 to 2014
State	2014	2013	2012	2011	2010	2009	2008	2007	2006	2005	2004
Alabama	AA	AA	AA	AA	AA	AA	AA	AA	AA	AA	AA
Florida	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AA+
Georgia	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AAA	AAA
Mississippi	AA	AA	AA	AA	AA	AA	AA	AA	AA	AA	AA
Tennessee	AA+	AA+	AA+	AA+	AA+	AA+	AA+	AA+	AA+	AA	AA
Source: Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014

Federal aid to the state budget

See also: Federal aid to state budgets

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.

The table below notes what share of Alabama’s general revenues came from the federal government in 2012. That year, Alabama received approximately $8.1 billion in federal aid, 36.5 percent of the state's total general revenues. Figures from surrounding states are provided for additional context.

Federal aid to state budgets, 2012
State	Total federal aid ($ in thousands)	Federal aid as a % of general revenue	Ranking
Alabama	$8,112,509	36.50%	9
Florida	$22,850,620	25.48%	30
Georgia	$13,794,726	29.02%	7
Mississippi	$7,725,294	34.51%	1
Tennessee	$11,198,575	40.97%	3
Source: United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014

Stimulus

According to Recovery.gov, the official government website for the Recovery Accountability and Transparency Board, under the American Recovery and Reinvestment Act, Alabama received $3,335,790,000 in federal stimulus funding between February 2009 and June 2013.

Budget process

The state operates on an annual budget cycle. Alabama's fiscal year runs from October 1 and ends September 30 of the following year. The sequence of key events in the budget process is as follows:

1. In September of the year preceding the start of the new fiscal year, budget instructions are sent to state agencies.
2. In November, agencies submit their budget requests to the governor.
3. By the second legislative day of each regular session of the legislature, the governor must submit his or her proposed budget to the state legislature. These dates vary from session to session, occurring as early as January and as late as March.
4. The legislature adopts a budget between February and May. It must pass with a simple majority.

The governor is required to submit a balanced budget to the legislature. In turn, the legislature must pass a balanced budget.

Alabama is one of 44 states in which the governor has line item veto authority.

Agencies, offices, and committees

There are five major standing committees in the Alabama State Legislature that deal with budget and finance matters:

1. Senate Finance and Taxation Education Committee
2. Senate Finance and Taxation General Fund Committee
3. House Ways and Means Education Committee
4. House Ways and Means General Fund Committee
5. Joint Finances and Budget Committee
6. Ways and Means Education Committee, Alabama House of Representatives
7. Ways and Means General Fund Committee, Alabama House of Representatives

The duties of the Alabama State Auditor include auditing the records of the Alabama Treasurer and reporting the findings to the governor. The auditor is elected during federal midterm election years.

The Alabama Treasurer is the state's chief financial officer. The treasurer is also elected during federal midterm election years.

Studies and reports

U.S. PIRG "Following the Money" report

See also: "Following the Money" report, 2014

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured the transparency and accountability of state websites with regard to state government spending. According to the report, Alabama received a grade of D and a numerical score of 55, indicating that Alabama was lagging. in terms of transparency regarding state spending.

As published 2014

The information on this tab contains: Spending (fiscal year 2013) Spending by function (fiscal year 2012) Spending trends (fiscal years 2008 to 2012) Revenues (fiscal year 2013) Historical spending (fiscal years 2009 to 2012) Budget transparency

Between fiscal year 2009 and fiscal year 2013, Alabama's total expenditures increased by approximately $4.38 billion, from $19.74 billion in 2009 to $24.12 billion in 2013. This represented a 22.19 percent increase, outpacing the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).

Spending

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:

• General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."
• Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the 'Other funds' column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."
• Federal funds: "Funds received directly from the federal government."
• Bonds: "Expenditures from the sale of bonds, generally for capital projects."

2013 expenditures

Breakdown of expenditures in FY 2013
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context). Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)
State	General fund	Federal funds	Other funds	Bonds	Total	Per capita expenditures
Alabama	$6,897	$9,541	$7,490	$189	$24,117	$4,989.32
Florida	$24,717	$24,737	$18,437	$2,084	$69,975	$3,578.76
Georgia	$18,303	$11,752	$10,211	$808	$41,074	$4,110.62
Mississippi	$4,699	$8,274	$5,660	$784	$19,417	$6,491.36
Tennessee	$12,622	$13,055	$5,394	$382	$31,453	$4,841.92
Per-capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates. Source: National Association of State Budget Officers

Spending by function

2012

Breakdown of expenditures by function in FY 2012
Source: National Association of State Budget Officers

State expenditures in Alabama can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percentages, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percentages)
State	Elementary and secondary ed.	Higher ed.	Public assistance	Medicaid	Corrections	Transportation	Other
Alabama	20.9%	20.1%	0.2%	23.3%	2.5%	6.1%	27.0%
Florida	18.8%	7.1%	0.3%	30.6%	4.2%	11.0%	28.1%
Georgia	24.0%	18.7%	0.1%	21.5%	3.7%	5.2%	26.8%
Mississippi	16.9%	16.8%	5.8%	23.4%	1.8%	7.5%	27.7%
Tennessee	17.7%	12.8%	0.4%	30.7%	2.7%	6.4%	29.3%
Source: National Association of State Budget Officers Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."

Spending trends

Between 2008 and 2012, elementary education spending increased by more than seven percentage points, or 52.5 percent, as a share of the budget. Similarly, higher education spending increased by 9.6 percentage points, or 91.4 percent, as a share of the budget. Medicaid spending increased by 12.3 percentage points, or 111.8 percent, as a share of the budget. During the same period, spending categorized as "other" fell by more than 30 percentage points, or 55.1 percent, as a share of the budget. The table below details changes in expenditures from 2008 to 2012. Figures are rendered as percentages, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percentages)
Year	Elementary and secondary ed.	Higher ed.	Public assistance	Medicaid	Corrections	Transportation	Other
2012	20.9%	20.1%	0.2%	23.3%	2.5%	6.1%	27.0%
2011	24.9%	22.5%	0.3%	24.9%	2.9%	6.9%	17.7%
2010	24.3%	21.4%	0.2%	25.8%	2.9%	8.2%	17.1%
2009	25.0%	20.7%	0.2%	25.5%	2.9%	6.5%	19.2%
2008	13.7%	10.5%	0.1%	11.0%	1.4%	3.1%	60.2%
Change in %	7.2%	9.6%	0.1%	12.3%	1.1%	3%	-33.2%
Source: National Association of State Budget Officers Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)
State	Sales tax	Personal income tax	Corporate income tax	Gaming tax	Other taxes and fees	Total	Per capita revenue
Alabama	$1,945	$3,104	$376	$2	$1,887	$7,314	$1,513.12
Florida	$18,302	$0	$2,233	$242	$4,244	$25,021	$1,279.66
Georgia	$5,226	$8,486	$706	$0	$3,562	$17,980	$1,799.41
Mississippi	$1,887	$1,480	$463	$145	$763	$4,738	$1,583.98
Tennessee	$6,643	$126	$1,083	$0	$3,551	$11,403	$1,755.39
Per-capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013. Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013. Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, Alabama ($ in millions)
Year	Sales tax	Personal income tax	Corporate income tax	Gaming tax	Other taxes and fees	Total	Per capita revenue
2013	$1,945	$3,104	$376	$2	$1,887	$7,314	$1,513.12
2012	$2,028	$2,919	$379	$2	$2,060	$7,388	$1,533.57
2011	$1,925	$2,693	$291	$2	$1,944	$6,855	$1,427.64
2010	$1,882	$2,486	$415	$2	$1,700	$6,485	$1,355.12
2009	$1,781	$2,586	$447	$2	$2,466	$7,282	$1,546.50
Change in %	9.21%	20.03%	-15.88%	0.00%	-23.48%	0.44%	-2.16%
Per-capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates. Source: National Association of State Budget Officers

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported Total Expenditures in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).

Historical state spending in Alabama ($ in millions)
Fiscal year	General Fund		Other funds		Federal funds		Bonds		Budget totals
	Total	% of Budget	Total	% of Budget	Total	% of Budget	Total	% of Budget
2011-2012	$7,274	30%	$7,270	30%	$9,308	38%	$326	1%	$24,178
2010-2011	$6,842	28%	$6,753	28%	$10,252	42%	$292	1%	$24,139
2009-2010	$6,588	32%	$4,963	24%	$8,662	42%	$391	2%	$20,604
Averages:	$6,901	30%	$6,329	28%	$9,407	41%	$336	1%	$22,974

Budget transparency

Transparency evaluation
Searchability	Y
Grants	Y
Contracts	Y
Line item expenditures	Y
Dept./agency budgets	Y
Public employee salaries	Y
Last evaluated in 2012.

See also: Evaluation of Alabama state website and Constitutional provisions regarding reading of bills

On February 11, 2009, Governor Bob Riley signed an Executive Order to create a state spending database. The order mandated that the site, to be operated by the state Department of Finance, be up by March 1, 2009. The site can be accessed here.

The table to the right is helpful in evaluating the accessibility and scope of the information provided by the Alabama state spending database.

Alabama does not have a constitutional provision providing a legislative review period.

Transparency legislation

See also: Alabama transparency legislation

2011

• The Alabama House of Representatives passed a bill that would require elected officials and candidates for office to disclose contracts with state agencies by a vote of 96-0. The bill was sponsored by Rep. Mike Ball.
• The House also voted to require monthly reports on the condition of the General Fund and Education Budget by a vote of 97-0. The bill was sponsored by Rep. Paul DeMarco.

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Alabama, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Alabama tied for 46th in the nation with three other states, earning three out of eight possible points.

Alabama - IGPA score for budget process, contents and disclosure
Budget transparency indicator	Yes or no?
Performance measures	N
"Generally Accepted Accounting Principles" budget	N
Multi-year forecasting
Annual cycle
Binding revenue forecast	N
Legislative revenue forecast	N
Nonpartisan staff
Constitution or statutory tax/spend limitations	N
TOTAL	3

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.

U.S. PIRG "Following the Money" report

See also: "Following the Money" report, 2014

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured the transparency and accountability of state websites with regard to state government spending. According to the report, Alabama received a grade of D and a numerical score of 55, indicating that Alabama was lagging in terms of transparency regarding state spending.

Prior fiscal year budgets

Fiscal year 2016

Governor Robert Bentley signed Alabama's fiscal year 2016 budget on September 17, 2015. This signing ended a budget stalemate only two weeks before the fiscal year was to begin (October 1, 2015). The budget cut general fund spending by about 4.5 percent from the previous year. Medicaid, prison, mental health, human resources and state court system spending remained about equal to spending in fiscal year 2015, but many other programs and agencies saw cuts of about 5.5 percent. These cuts were made in order to prevent tax increases. Governor Bentley sought to avoid program cuts through increases in taxes, but was met with opposition in the legislature.

Additionally, the new budget moved about $80 million in tax revenue from the state's education trust fund to the general fund. New taxes on pharmaceuticals and nursing homes were also created to increase revenue for Medicaid.

Fiscal year 2015

See budget bill: S.B. 184: Education Trust Fund Appropriations
See budget bill: H.B. 235: State General Fund Appropriations

Governor Robert Bentley announced his fiscal year 2015 budget proposals on January 28, 2015. Bentley's Education Trust Fund budget totaled approximately $5.9 billion and his General Fund budget totaled roughly $1.8 billion. Under the governor's budget proposals, K-12 education spending would have increased by $153.6 million and higher education spending would have increased by $30.8 million. General Fund spending would have increased by roughly $16 million.

Bentley signed into law the state's Education Trust Fund budget on April 11, 2014. The budget as enacted included $60 million less in spending than the governor's proposal. The enacted General Fund budget, conversely, included approximately $17.3 million more in spending than the governor's proposal.

Fiscal year 2014

Alabama state budget -- 2014
Alabama State Legislature
Text:	SB 143
Legislative history
Introduced:	February 6, 2013
House:	April 23, 2013
Vote (lower house):	75-27
Senate:	March 12, 2013
Vote (upper house):	22-9
Conference:	May 9, 2013
Conference vote (lower house):	74-25
Governor:	Robert J. Bentley
Signed:	May 9, 2013

On May 9, 2013, the state legislature delivered two budget bills for fiscal year 2014 to the governor -- SB 143, the General Fund budget, and HB 166, the Education Trust Fund budget. The $1.7 billion General Fund budget included significant increases for corrections and prison facilities. The $5.8 billion Education Trust Fund budget included a two percent pay raise for elementary and secondary education employees, the first such pay raise since fiscal year 2008.

For fiscal year 2014, the grand total of all appropriations (including, in addition to the General Fund and the Education Trust Fund, earmarked state, federal and local funds) came to roughly $28.5 billion.

Fiscal year 2013

See also: Alabama state budget (2012-2013)

Fiscal year 2012

See also: Alabama state budget (2011-2012)

Fiscal year 2011

See also: Alabama state budget (2010-2011)

Fiscal year 2010

See also: Alabama state budget (2009-2010)

See also

• Alabama state budget and finances