Alabama lawmakers hope to redirect some money that had been planned to offset costs of teacher health insurance to the construction of the new $400 million statehouse in Montgomery.
Lawmakers need to find $75 million this year to begin paying on the new statehouse, which is expected to open in January 2027.
On Wednesday, the House Ways and Means Education Committee approved $180 million for PEEHIP in the Education Trust Fund, less than initially requested by Gov. Kay Ivey.
The approval is just one step in the state budget process; the end result might look different.
Budget challenges
Lawmakers started discussing state budgets this week.
Budget proposals include $10.5 billion for the Education Trust Fund, which supports K-12 and higher education.
Initially, Ivey suggested $210 million in ETF money go toward PEEHIP, the insurance program that supports state education employees.
PEEHIP faces a $380 million shortfall thanks to rising costs of health care. The program’s independent board asked the state for $1.5 billion to fix the issue.
That’s not happening.
Lawmakers are trying to send some money — but teachers might still see changes in benefits.
The House Ways and Means Education Committee approved $180 million for PEEHIP in the Education Trust Fund.
Out of the $210 million initially proposed by Ivey, the committee decided to send $9 million to the Children’s Health Insurance Program (CHIP) and $10 million to the annual state house payment, according to committee chair Rep. Danny Garrett (R-Trussville).
Garrett said during the committee meeting that the remaining money will be used elsewhere.
The PEEHIP monthly employer rate per employee will be $1,048 per month, according to the revised ETF. The current rate is about $900 per month.
Legislators are also considering teacher pay raises. Leaders have said they hope to give teachers a 2% raise, which would take effect Oct. 1.
Other education budget priorities include more funding for reading, career tech and high-needs students.
Alabama’s new statehouse might get money meant for rising teacher health insurance costs
