January 2024 Group Watch: Education Revenues Remain Flat
State tax revenue into the Education Trust Fund continue to be down slightly in fiscal year 2024, as state budget leaders prepare for the legislative session just one month away. Lawmakers will learn next month if receipts are expected to rally enough in 2025 to drop another penny from the state’s sales tax on groceries. Total Education Trust Fund revenue was down $25.3 million or 2.5 percent in December when compared to a year prior. In the first three months of fiscal 2024, total revenues were $2.4 billion, down $29.2 million or 1.19 percent. Relative flatlined education revenue isn’t a tremendous concern for budget leaders as they planned to spend less on education than expected revenues this year. The Education Trust Fund collected a record $10.4 billion in 2023; the education budget for 2024 is $8.8 billion. Alabama is not alone in declining revenue in recent years. The Associated Press reported that some states are facing serious deficits as federal COVID-19 pandemic relief spending runs out. As a result, states are expected to pass fewer tax cuts during the 2024 legislative sessions. In The Alabama General Fund, which supports non-education state agencies, revenues continue to grow over 2023, largely due to earnings from high-interest rates. The General Fund is not expected to require additional growth to support 2024 expenditures.
