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The Alabama Senate has advanced legislation to overhaul the state’s method for funding public education.
SB305, introduced by Sen. Arthur Orr, R-Decatur, would establish a new funding system called the Renewing Alabama’s Investment in Student Excellence program. This initiative, which would create the RAISE Fund, is designed to better support underserved students across the state.
Currently, Alabama allocates education funding based on average daily attendance. The new formula would replace that model with a weighted system that allocates additional resources for students in specific categories, such as those living in poverty, English language learners, special education students, gifted students and those attending charter schools.
As part of the plan, a companion bill was also approved to transfer $375 million from the Educational Opportunities Reserve Fund, a savings account dedicated to educational initiatives, into the new RAISE Fund. This funding is expected to support the program through its first three years. Of the total amount, $100 million is slated for the first year, followed by $125 million in the second year and $150 million in the third.
Lawmakers said this phased approach is intended to provide school districts with financial stability as they adjust to the new system. The structure allows districts to plan and invest with confidence, knowing that funding support will be sustained over time.
The legislation follows months of dialogue between lawmakers and education advocates who have pushed for a student-based funding model. The proposed formula includes a base funding amount for every student, with additional weights applied based on individual student needs.
A substitute to the bill clarified the flexibility that schools will have in how they utilize funds. The initial bill merely stated that local educational agencies were “given flexibility in spending decisions when serving the needs of the student groups that generated the funds.” Orr’s floor substitute clarified that there is leeway for LEAs to “combine or shift funding across student groups that generated the funds to best serve students with the greatest need while meeting federal maintenance of effort requirements.”
“We are just allowing the money to be moved by the local school board superintendent among the groups as they see fit, that it’s not so rigid that if I get X for special ed, I have to spend X for special ed,” said Orr.
The bill now heads to the House Ways and Means Education Committee for further consideration.
