Alabama third graders showed major improvement in reading performance in 2024, as the percentage of Alabama students reading sufficiently by the end of third grade jumped by 8 percentage points compared to the previous year. The number of 3rd graders scoring “below grade level” on reading decreased from over 9,000 in 2023 to under 5,000 in 2024, from 17% to 9% of third graders, according to results released earlier this month by the Alabama State Department of Education.

Printable PDF available here.

The Department contracts with PARCA to evaluate the Department’s implementation of the Literacy Act. PARCA’s evaluation and public research divisions operate separately.

Figure 1. ACAP reading performance 2023-2024 compared

Investments in Better Instruction and Support

The improving reading performance comes after significant investment and effort in improving reading instruction, a push launched after the passage of the Alabama Literacy Act of 2019. Funding for the Alabama Reading Initiative has more than doubled to over $100 million annually. That spending supported:

• Thousands of teachers trained or retrained in reading instruction grounded in the “science of reading.“
• Every school with grades K-3 having a dedicated reading coach, focused exclusively on grades K-3, working with teachers to improve reading instruction.
• A corps of state-trained reading specialists deployed to support teachers and coaches, with a particular concentration on struggling schools.
• Schools identifying struggling readers as early as Kindergarten, informing parents, and developing reading intervention plans to bring the child to reading sufficiency.
• Struggling students being screened for learning challenges and receiving the support of specialists.

Other factors (see below) also may be influencing the gains, but the initiative appears to be yielding positive results.

Big Gains by Schools with High-Levels of Economic Disadvantage

This year, the biggest improvements were among high-poverty, high-academic-challenge schools. Yes, those schools had more room for improvement, but the gains were substantial, and only a handful of systems lost ground. Top improving systems included smaller rural systems like Perry and Greene counties, plus Anniston City Schools. Charter schools like Breakthrough Charter School in Perry County, and Legacy Prep and i3 Academy in Jefferson County also showed improvement. Life Academy also shows up as a top gainer, but in percentage terms, the school still trails most districts, with 25% of its students not reading sufficiently, according to the ACAP.

Figure 2. Gains in performance, 2024 and 2023 compared

Among large systems, Birmingham City Schools was the top in percentage point improvement, cutting the percentage of its students reading below grade level in half. Montgomery County School System was close behind with an 18-percentage point improvement. However, both systems, which have higher concentrations of economically disadvantaged students, still have almost 20% of students below the reading sufficiency threshold.

Because of their size, Montgomery County ranks No. 2 and Birmingham City No. 3 in the number of students below grade level. Birmingham had 319 students who failed to hit the mark, and Montgomery had 393. Mobile, the state’s largest school system, had 476 students below the threshold, representing 13% of tested third graders. Figure 3 positions school systems on the graph according to two measures. Systems with a high percentage of students reading on grade level are higher on the chart. Systems with low rates of student poverty are to the right of the chart and are shaded green.

Systems with higher poverty rates are shaded red and are arrayed on the left side of the chart. The size of the circle and the number represent the number of students not reading sufficiently. In general, systems with higher rates of poverty have higher numbers of students who aren’t testing on grade level for reading.

While a system’s poverty rate is somewhat predictive of its reading performance rate, this chart shows a good deal of variance among systems, indicating that high-quality teaching can overcome economic disadvantage.

Figure 3. Performance in the context of economic disadvantage, by system

School-level results show an even wider spread, and poverty levels are even less predictive of performance. Use the tabs and menus to explore and narrow the results to focus in on schools and systems of interest.

Figure 4. Performance in the context of economic disadvantage, by school

Other factors: Pandemic Recovery

One factor that may have contributed to higher success rates among students is the increased recovery time since the outbreak of the COVID-19 pandemic. This year’s third graders were in Pre-K when COVID-19 hit, and for many, their Kindergarten year was at least partially disrupted by pandemic-related school closures or modified schedules. However, those children have now had three full years of regular instruction by teachers with up-to-date training in reading instruction.

This year’s second graders also scored better than last year’s second graders, which suggests the combination of stable school conditions and improved instruction could lead to further improvement in subsequent years.

Other Factors: Consequences Spur Urgency

Another factor likely influenced improved performance was a greater sense of urgency. This spring, the final prong of the Literacy Act went into effect. Students who didn’t clear the reading sufficiency bar on the ACAP may be required to repeat the third grade. Affected students can attend a summer reading boot camp at the end of which they can be retested. In addition to the retest, there are some exceptions and alternatives that can result in the child going on to the next grade.

Regardless, school systems, parents, and students had extra motivation to clear the sufficiency benchmark. Students and parents were motivated to avoid retention. Schools wanted to avoid having high numbers of students repeat third grade.

Even though the retention provision wasn’t in effect, the number of students repeating Kindergarten, first, or second grade has risen starting in the 2020-2021 school year. Some of that might be related to lost learning due to the COVID-19 pandemic, but it may also be due to schools and parents becoming more aware of the need for students to master grade-level material before advancing to the next grade. Education researchers find benefits for students retained in the earliest grades, but negative consequences for retention in middle school.

Other Factors: Practice Makes Perfect

The state also provided schools with access to ACAP practice tests this year, which allowed teachers and students to get more comfortable with the format of the test and the kind of material presented. ACAP was first given in the 2020-2021 school year. It is a test specifically developed by Alabama, and it reflects the content Alabama students are expected to master. Adjustments to the test were made in the 2022-2023 school year to reflect updates to the English Language Course of Study. Teachers have now had more time to absorb and practice teaching the content.

Why the attention on third-grade reading?

From the time they enter school through the end of third grade, students are learning to read. Starting in fourth grade, students are expected to read to learn the material presented to them. If children can’t read in the fourth grade, they are more likely to fall behind. Academic research finds that students who aren’t reading on grade level by the end of third grade are four times less likely to graduate from high school than proficient readers. That disadvantage is further compounded if the students are Black, Hispanic, and/or poor. Research finds a correlation between early grades reading struggles, discipline problems in school, and lower levels of educational attainment and earnings later in life.

Alabama’s Literacy Act followed similar legislation in Florida and Mississippi. Both those states have seen large gains in reading scores on the National Assessment of Education Progress (NAEP), which provides the only comparative measures of student academic performance across states. Mississippi and Florida have higher reading scores than Alabama, and both perform above the national average. The results of the most recent NAEP, taken in 2022, contained an early positive hint. Alabama was one of only five states to make gains in fourth grade reading as most states lost ground in the wake of the pandemic.

Reality check: What does reading sufficiently really mean?

Terms like reading sufficiency, reading on grade level, and grade-level proficiency can be confusing, and the measures for such terms have been shifting over time based on reappraisals of test data.

When the State Department of Education released the reading data described in this report, it calculated the percentage and number of students as either “Below Grade Level” or “At or Above Grade Level.”

But here’s the fine print. A third-grade student can score anywhere between 275 and 740 on the ACAP Reading, which is a subset of the broader ACAP English Language Arts standardized test. (For an in-depth account of this issue, read the account provided by Trisha Crain Powell of al.com). Evaluating the ACAP Reading content and results, experts determined that students with a score of 473 would be on grade level, not proficient, but on grade level.

However, tests aren’t perfect measures, so practitioners calculate, based on results, a range of scores in which students might fall and still be on or about grade level.

Examining the results and making calculations, the testing experts recommended a cut score of 435, which is two standard errors below the grade-level mark. If a student scores under 435, the statistics indicate that there is more than a 90 percent chance that the student is truly below grade level. The lower cut score gives educators a higher level of confidence that the student in question doesn’t have the reading skills needed to succeed in 4th grade.

However, that also means that a lot of students who score between 435 and 473 might not be reading on grade level. And those students are more likely to run into struggles as learning after third grade increasingly depends on the ability to read.

The second-grade results also need explanation. On the recommendation of testing experts, the State Board of Education adopted a more rigorous cut score for the second graders of 455. That leads to a higher percentage of second graders being identified as below grade level. That means that more children in second grade will be identified and provided with extra support in hopes of getting them up to grade level by the end of third grade.

Figure 5. Second Grade ACAP Reading Results, 2023 and 2024 compared

The State Department of Education has signaled its intention to raise the cut score over time, bringing the reading sufficiency measure closer to the mark for grade-level reading. Mississippi used a similar approach as it phased in its literacy act.

More Alabama high school students graduated ready for college or careers in 2023, according to data recently released by the Alabama Department of Education.

Printable PDF available here.

Students in the Class of 2023 made gains on all measures, bouncing back from the setbacks suffered during the pandemic and closing the gap between the percentage of students receiving a diploma and the percentage of students meeting the definition of college and career readiness: 91% of seniors graduated, 84% of seniors were college and career ready. That’s the highest readiness rate ever recorded.

The results show progress toward a goal established by the state Legislature and adopted by the State Board of Education that all students demonstrate college and career readiness in order to graduate.

More seniors graduated in 2023, even though this cohort of seniors was smaller than the Class of 2022. Alabama’s college and career readiness rate (CCR) increased by five percentage points over the levels recorded in 2022.

In percentage terms, student readiness increased on every measure. However, college readiness, as measured by scores on the ACT, is still lower for the Class of 2023 than it was for graduating classes before the pandemic.

Still, improved performance on the ACT accounted for the biggest gains in the number of students reaching the CCR benchmark. Follow this link for PARCA’s analysis of ACT Scores for the Class of 2023.

Close behind were big gains in the number of students earning the CCR by successfully completing career-oriented courses taught at high schools, vocational centers, or community colleges, courses known as career technical education. Also, the number and percentage of students earning a career-ready score on ACT’s WorkKeys test increased. A deeper dive into 2023 WorkKeys results is available here. The number of students earning credit through dual enrollment courses at community colleges or universities also increased.

Alabama’s high school graduation rate is among the highest in the country, though that is a relatively recent phenomenon. In 2012, Alabama’s high school graduation rate was 75%, trailing the national average of 80%. By 2018, Alabama’s graduation rate had climbed to 90%, exceeding the U.S. rate of 85%. In 2022, the most recent available year for comparison, Alabama’s graduation rate was tied with the U.S. at 88%.

With the sharp rise in the graduation rate came concerns that some students were being awarded diplomas but weren’t prepared for the next step. In 2018, despite that 90% graduation rate, Alabama’s college and career readiness rate was still at 75%.

Pressure to close that gap between graduation and college and career readiness has been building. Last year, the Legislature passed a requirement that by 2026, all students, in order to graduate, must have met one of the Alabama Board of Education’s definitions of college and career readiness. The Legislature subsequently provided $25 million in FY 2024 to support schools in expanding opportunities for college and career readiness. Last year, Gov. Ivey’s Commission on Teaching and Learning recommended allocating $25 million in ongoing support for the grant program.

Students can demonstrate that they are ready for college or the workforce in several ways:

1. Achieve a benchmark score in one subject on the ACT. Benchmarking on the ACT indicates that a student is likely to succeed in a college class in that subject.
2. Earn a Silver Certification or above on the ACT WorkKeys test. WorkKeys is a test of knowledge, communication, and comprehension as they are applied in the workplace. Scoring Silver or above indicates a student is ready to enter the workforce in most career fields.
3. Earn college credit through Advanced Placement or International Baccalaureate courses taken in high school.
4. Earn college credit through dual enrollment. A high school student can complete courses at a community college or university while in high school. These can be academic or career-related courses.
5. Complete a progression of Career Technical Education courses in a field.
6. Earn an Industry Recognized Credential as part of a career technical education course.
7. Participate successfully in an In-School Youth Apprenticeship Program approved by the Alabama Office of Apprenticeship.
8. Successfully enlist in the military.

While progress is being made, gaps remain.

In 29 school systems, all graduates were college and/or career-ready. In 20 of those systems, more seniors were college and career-ready than graduated.

On the other hand, in six school systems, the CCR rate was 20 percentage points lower than the graduation rate, indicating that 20% or more of the students who received diplomas hadn’t demonstrated readiness for college or the workforce.

The gaps in graduation rates between subgroups within the school population are relatively narrow: 93% of White students graduate compared to 89% of Black Students and 87% of Hispanic students. Gaps are wider when it comes to college and career readiness: 89% of White students graduate college and career-ready, but only 76% of Blacks and 79% of Hispanics do. Looking at the individual CCR measures, the gap between Blacks and Whites is highest in the percentage of students benchmarking on the ACT. It’s narrowest in terms of the percentage of students earning credit through career technical education. In that category, Black and Hispanic students have a higher CCR rate than Whites.

Using the tabs and menus in the visualization, you can explore the results for individual schools and school systems.

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VOICES for Alabama’s Children published the 2023 Alabama Kids Count Data Book today, marking the 30th edition of the book published by the nonprofit. For the 8th year in a row, PARCA worked with VOICES as a data partner for the project.

– Children of color and children in poverty are shown to have much poorer outcomes and much poorer achievements in education.

– Child population continues to decrease. Over the last year, the number of children grew in only 20 of 67 counties.

– Children in Alabama are becoming increasingly more diverse ethnically and racially. While white and Black child populations are declining, since 2000, Hispanic children grew approximately 276%. The Asian/Pacific Islander population grew by 120%.

– The infant mortality rate has slightly decreased from 8.1 to 7.6 per 1,000 live births from 2011-2021. In real numbers, that means that 443 babies did not live to their 1st birthday in 2021. Maternity care is critical. 34.3% of Alabama counties are defined as maternity care deserts. More than 28% of Alabama women had no birthing hospital within 30 minutes, which is more than double the U.S. rate.

– In 2022, the percentage of Alabama high school students meeting college and career ready requirements was 79.1% from 76.5% in 2021.

– 2023 Work-based learning programs (Dual Enrollment and Career Training Programs) are estimated to have had an economic impact of $420,209,126.

– From 2015-2023 there has been a 16.9% increase in the number of children entering foster care services. Parental drug use is the leading reason for children entering foster care, making up 44%, followed by neglect at 22%.

– 10.4% of children in the state are living in extreme poverty. Black and Hispanic populations are disproportionately affected (38.3% and 36.7% respectively), while white children make up 13.5% of children in extreme poverty.

See how children in all 67 counties of our state are faring in education, health, economic security, and more. VOICES believers that every child in Alabama should have access and opportunity to thrive and become all they can be, and hopes that by utilizing this book’s insights, we can identify the challenges, set priorities, track our progress, and achieve real outcomes for children and families.

Access the 2023 Alabama Kids Count Data Book here.

Want to see this data at the national level? Visit the national KIDS COUNT Data Center to access hundreds of indicators, download data and create reports and graphics!

PARCA’s most recent public opinion survey finds, once again, aversion to certain taxes, support for public education, and mistrust in state government. At the same time, the survey finds a lack of consensus on how the state should respond to other critical issues.

Among the findings:

• Alabamians continue to rank education as the most important state government activity.

• Large majorities of Alabamians say the state spends too little on education and healthcare.

• Alabamians have an aversion to taxes but say upper-income residents pay too little.

• Alabamians are willing to pay more taxes to support education but do not agree on which taxes should be increased.

• A plurality (48%) of Alabamians would prefer to educate their children in public schools.

• A majority of Alabamians support school choice options.

• A large majority believe private schools receiving state funds should meet all standards required of public schools.

PARCA’s annual public opinion survey was conducted between October 24 and December 26, 2023. The mixed-mode sample includes a mix of respondents from a statewide random digit dialed (RDD) sample of cell and landline numbers and an Internet panel provided by Qualtrics. The poll of over 500 Alabama residents was conducted by Dr. Randolph Horn, Samford University, Assistant Vice President for Enrollment Research and Professor of Political Science. 

Results of the survey indicate many opportunities for officials to demonstrate responsiveness to public concerns and leadership in crafting public policy solutions.

Download the full report here.

The number and percentage of high school seniors graduating workforce-ready rose with the Class of 2023, according to the results of ACT’s WorkKeys Assessment, a test of skills given to public high school seniors. The results are another sign that student performance is recovering from post-pandemic lows, though the recovery is not complete.

Printable PDF available here.

The WorkKeys test measures practical math, reading, and graphical literacy skills as they are employed in the workplace. That’s different than the ACT, which tests for knowledge and skills needed in a college classroom. In 2023, 72% of seniors took the test statewide, and 62% of those tested scored at or above the silver level of workforce readiness.

Figure 1. WorkKeys Results, Statewide Trends

WorkKeys is optional, and school systems vary in the percentage of students tested. WorkKeys was given to all seniors through 2019, but the State Department of Education stopped mandating the test. Some systems still test all seniors. Some systems make the test an option for students who haven’t demonstrated college and career readiness by another measure. WorkKeys is one of seven options for demonstrating college and career readiness.

Figure 2. Numbers and percentages of participation and passing the workforce-ready benchmark

In addition, a student’s score on WorkKeys can be a recognized credential in the job market. Some businesses, particularly industrial employers, build WorkKeys into their hiring practices. Working with ACT, those employers have determined what level of proficiency, as measured by WorkKeys, is needed in particular jobs. Depending on their test performance, students earn a platinum, gold, silver, or bronze National Career Readiness Certificate. A student scoring Silver or above has the foundational skills for 67% of jobs that ACT has profiled, and that student is considered college and career-ready by the Alabama Board of Education.

Figure 3. Percentage of all students workforce ready (scoring Silver or Above), by system, 2023 (Pictured are systems in which 90% of students were tested. Adjust filter to see other systems)

In Figure 3, the school systems are shaded by the percentage of economically disadvantaged students in each system. In general, systems with higher poverty percentages tend to have lower percentages of students scoring workforce ready. However, on WorkKeys, the correlation is not nearly as strong as it is with other measures, like the ACT college readiness test. WorkKeys seems to provide a more even playing field for comparative performance.

However, the 2023 WorkKeys test results do show a pattern similar to other assessments in the wake of the Covid-19 pandemic. After dropping in 2020, 2021, and 2022, WorkKeys results rebounded more strongly among nonpoverty students in 2023. In contrast, students from low-income backgrounds have been slower to recover to pre-pandemic levels.

Figure 4. Percentage Workforce Ready by School, 2023

The visualization below presents the results in a more detailed fashion. Each color represents the percentage of tested students scoring at each level: platinum, gold, silver, bronze, and no certificate earned. Use the menus to adjust the comparison and use the various tabs, to explore different aspects of the data.

Figure 5. WorkKeys Results, by level of certification, by system, 2023

ACT Scores for Alabama public high school students improved in 2023, bucking a downward trend nationally and providing another clue that Alabama schools began recovering from the Covid-19 pandemic more quickly than schools nationally. Students in the graduating class of 2023 were in ninth grade when the COVID-19 pandemic reached the U.S.

Printable PDF Document Available Here

Figure 1. Alabama Public High School Average Composite Scores, 2015-2023

Alabama’s Class of 2023 still trailed the score levels of classes tested prior to the academic disruptions wrought by COVID-19. The average composite score in 2023 was 17.72 on the ACT’s 36-point scale, up from 17.69 in 2022 but down from 18.58 in 2021.

The percentage of test-takers who achieved ACT’s college-ready benchmark in all four tested subjects – English, reading, science, and math – climbed to 12.8%. According to ACT, students scoring at or above the benchmark on a subject test have a 50% chance of earning a B in an introductory college course in the subject and a 75% chance of earning a C.

Figure 2. Percentage of students scoring at or above the college-ready benchmark in 2023, by subject

The scores of students from low-income households fell further during the pandemic and have not recovered to the same extent as students from non-poverty households.

The percentage of non-poverty students who were college-ready in reading was higher in 2023 than in the graduating Class of 2020. In English and science, the non-poverty students in the Class of 2023 had nearly closed the gap. In math, non-poverty students still have some catching up to do.

In comparison, the percentage of economically disadvantaged students who scored college-ready in 2023 remains significantly lower than pre-pandemic levels.

Figure 3. Comparing Poverty and Non-poverty Students’ College Ready Percentage, by subject, by selected years

Compared to other states

Nationally, a shrinking percentage of students of students were college-ready in 2023. In all four subject areas, the percentage of students scoring at or above the college-ready benchmark was the lowest in recent history. The average Composite score declined by 0.3 points, from 19.8 in 2022 to 19.5. Immediately before the pandemic, the U.S. average ACT composite score was 20.7 in 2019. While Covid led to sharp drops in scores, the national average score on the ACT has been trending down for several years. In 2017 and before, the national average composite was 21.

Comparing Alabama’s average composite score to the national average isn’t appropriate because of the difference in the universe of test-takers in different states. All Alabama public high school students take the ACT. In many states, only college-bound students take the test. Other states focus on the SAT instead, leaving only a small portion of students to take the ACT.

Looking strictly at the states where 100% of students took the test, the average composite score was 18.3, compared to Alabama’s 18 (When it comes to state-to-state comparisons, ACT provides a different state average than the data strictly focused on Alabama public school students).

Data provided by ACT and accessible through ACT’s online dashboard indicates that White students in Alabama have caught up to and scored at the same average as White students in other 100% states. However, Black and Hispanic students in Alabama haven’t regained as much ground. There also appears to have been a steep jump in the percentage of students scoring in the lowest ranges of the test. The percentage of Alabama students who scored 15 or below jumped from 34% to 41% during the pandemic.

Figure 4. Trends in the percentage of ACT test-takers in score ranges US vs. Alabama

Focus on Alabama Scores

Alabama students’ average scores improved in reading, English, and science but not math.

Figure 5. Trends in scale scores by subject

System Level Results

At the school system level, systems with a higher proportion of non-poverty students post higher average scores. Systems with a higher concentration of poverty post lower average scores.

Using the menu options on the right of the visualization, you can adjust variables to see the data through different lenses. Figure 6 presents the average scale score of non-poverty students in each system. Applying this different lens helps identify high-performing systems where higher poverty percentages might affect overall performance. More than half of the students in systems like Brewton, Huntsville, Haleyville, Jasper, and Demopolis are economically disadvantaged. But the Non-poverty students in those systems post average scores that rank them in the top 20 of school systems,

Figure 6. Non-poverty student’s average scores, by system

Meanwhile, Figure 7 compares the average scale score of economically disadvantaged students attending the various systems. Again, this different lens reveals a different set of high-performing schools. More than 40% of students in Satsuma, Saraland, Arab, and Oneonta are economically disadvantaged, and yet economically disadvantaged students there score higher than the all-students average statewide. Economically disadvantaged students make up more than half the student body in Brewton and Winfield, but despite that concentration, the system average for students in poverty ties or beats the state all-student average.

Figure 7. Economically Disadvantaged Students’ Average scores, by system

Examining results at the school level is also important for identifying high performance. Figure 8 presents the average scores of Black students by school. The highest average scores are found in Montgomery, Birmingham, and Huntsville magnet schools.

Figure 8. Black students’ average scores, by school

Use the menus and tabs to explore data on your own, find your school or system, and make comparisons keeping in mind student body socioeconomic composition. Available data options include:

• Change in system performance
• Change in school performance (when looking at the biggest change, keep in mind that schools new to the comparison may be improving from zero the year before)
• Get an idea of the average ACT score of students admitted to Alabama colleges and universities and also the average score of the lowest 25% and upper 75% of enrolled students.

Alabama’s public school enrollment is down slightly for the 2023-2024 school year, with a decline in the number of white students enrolled, partially offset by a growing enrollment of Hispanic students. Just over half of public school students, 51% are white, 32% Black, and 11% Hispanic. This year’s enrollment continues a long-term trend. In 2000, 62% of students were white, and the percentage of Hispanic students barely registered.

The percentage of students identified as economically disadvantaged is at an all-time high, with 60% of enrolled students directly qualifying for a free lunch under the National School Lunch program. Qualification is based on having a household income that qualifies for federal benefits like housing, food, or health care support. The percentage of children identified rose substantially after Alabama’s Medicaid program began working with the Department of Education to identify students who qualified for Medicaid and related benefits. Coming out of the Covid pandemic, the number of families and children is elevated. Federal law prohibits states from removing patients from Medicaid rolls during a public health emergency. With the public health emergency now over, Medicaid is reassessing which households remain eligible.

The school systems seeing enrollment gains are generally found in places where the population is growing: north Alabama systems in and around Huntsville and to the south in Baldwin County. Growth in enrollment is also occurring at public charter schools that are starting up or adding grades. School systems offering online or virtual school programs have also shown gains. Read Al.com’s reporting on trends in school populations.

Rural systems saw the largest declines in percentage terms. Large county and city systems in Mobile, Montgomery, Shelby County, and Birmingham accounted for the larger numeric declines in enrollment.

Use the tabs to explore data, for your local schools and systems.

Despite the wild gyrations in the economy since the outbreak of COVID-19 in the spring of 2020, the latest comparative data from the U.S. Census Bureau finds Alabama in a familiar position: at or near the bottom in state and local government tax collections.

Key Findings

• Alabama is a low-tax state: In FY 2021, adjusted for population, Alabama collected less in state and local taxes than all but one other state. Alaska, thanks to disruptions in the oil market over the period, had the lowest per capita revenues.

• Alabama’s per capita property tax collections are the lowest in the nation. That helps owners of homes, farms, and timberland but creates a revenue deficit, leaving state and local governments with less to spend to provide government services such as education, health, and public safety.

• Alabama’s state and local sales tax rates are among the highest in the U.S., which compensate for low property taxes.

• Alabama’s income tax does not provide the balancing effect that income taxes in other states do. Low-income workers begin paying taxes at a lower threshold than any other state. At the other end of the spectrum, Alabama is the only state that allows a full deduction for federal income taxes paid, a tax break that benefits high-income earners.

Despite unusual circumstances, Alabama’s rankings in per capita state and local tax collections were generally consistent with rankings in prior years.

Motor fuel collections per capita jumped in rank because half of Alabama’s fiscal year was pre-pandemic at a time when the economy was booming and gas prices high. In contrast, most states’ fiscal years began in the months after the pandemic began. Gas prices plummeted, and the total miles traveled on American roads didn’t recover until the calendar year 2022.

Alabama’s sales and gross receipts were also elevated thanks to the state’s high sales tax rate, the elevated volume of pandemic-related buying, and the economic stimulus payments that accelerated spending beginning in April 2020.

Despite all that, Alabama continues to lag behind almost all other states in total per capita collections.

Table 1. Alabama Rank in Per Capita Tax Collections, 2019, 2020, 2021.

In the years since FY 2021, tax revenues have surged based on the infusion of federal stimulus, low unemployment, and high inflation. Legislators have responded by making needed investments, particularly in education, in the form of teacher pay raises and a surge of additional support for literacy and math instruction.

At the same time, the Legislature has also passed tax cuts. In 2022, it increased the standard deduction for low-income Alabamians, allowing more households to shield more of their earned income from the income tax. In 2023, the state sales tax on food items was reduced from 4% to 3%, with a further 1% reduction scheduled for 2024 if revenue targets are met. These targeted tax cuts are a fitting response at a time when inflation is elevated, 3 with state tax collections surging to historic highs and federal COVID-19 relief funds swelling government accounts.

Flush times could allow Alabama to address years of chronic underinvestment compared to other states. Unacceptable conditions, such as understaffed and crumbling prisons, persist. Investments in education that show positive results must be sustained. However, as growth slows and federal aid is exhausted, Alabama governments will likely return to a familiar position of having less money to spend and yet a greater need for government services.

PARCA’s interactive charts allow you to explore a variety of statistics regarding Alabama’s taxes and tax revenue in comparison to other states. For the entire analysis, see our complete report in a printable version. Or read an embedded copy of the report below.

Increases, Decreases, and Trends in the Revenue Supporting State Government

The 2023 fiscal year, which ended on September 30, was a mixed year for Alabama revenue collections.

After several years of strong growth, Alabama tax collections turned in a mixed performance in 2023, with the General Fund (GF), which supports non-education spending, up substantially. Education Trust Fund (ETF) revenues, meanwhile, were basically flat after increasing by record levels in 2022.

GF collections increased 16.6%, led by a steep rise in revenue from interest on state deposits. The ETF barely budged, up 0.11%, with sales tax revenue increasing but income tax revenue down. That’s according to reports released last month by the state.

PARCA’s interactive charts allow you to explore trends in the various revenue sources that support the operations of state government in Alabama. For a detailed review of FY 2023 collections, see our complete report in a printable version. Or read an embedded copy of the report below.

The Alabama State Board of Education voted on Thursday to change the test score students must earn to be considered reading on grade level by the end of third grade. The change was recommended by testing experts due to changes made in the content of the 2023 test and shifts in results.

Using the score the state had in place, 24% percent of third graders who took the state standardized test in the spring of 2023 would have scored below the grade level reading mark. Using the target adopted by the board on Thursday, 17% of those students would have scored below grade level.

The grade-level reading target will take on increased importance this spring when the retention provision of the Alabama Literacy Act takes effect. At that point, students testing below grade level by the end of third grade could be held back. (Students will have a chance to get up to grade level during an intensive summer literacy camp. Other exemptions and methods of evaluation are also available).

The second and third-grade reading cut score changes received the most attention because of the implications. However, the changes to the state standardized tests of English Language Arts (ELA) were made across all grades in 2023. Along with changes in test content, the test scale was shifted, and proficiency cut scores adjusted. The changes make performance comparisons and trends across years difficult to interpret.

The Alabama Comprehensive Assessment Program (ACAP) is a series of standardized tests specifically built for Alabama, designed to test students at each grade level as they progress through the Alabama’s courses of study in English Language Arts, Math, and Science.

The original ACAP reflected the course of study in place in 2020. However, in 2021, the state adopted a revised ELA course of study. That revised course of study included a heightened focus on reading skills as called for by the Alabama Literacy Act. Changes to the course of study included:

• phonemic awareness and fluency added in grades 2-3;
• phonics added in grades 2-5
• listening skills added in grades 2-8
• text-dependent writing added to grades 2-3
• Recognizing and producing writing in different modes: narrative, informational, and opinion writing added in grades 2-8

Thus, with new concepts and points of emphasis added to the test, the test results were re-examined in light of the changes. Cut scores for the four achievement levels were adjusted. As a result, the test score a student needed to be considered proficient, i.e. scoring at either level 3 or level 4, was changed.

Comparing 2023 and 2022 results, average numeric scores in 2023 were lower in every grade but 6th. However, since the tests were changed and the scales were changed, the state department recommends against comparing scores from year to year.

While mean scores were down, proficiency rates were generally up. The percentage of students earning a score in the proficient range increased in all grades except third and eighth, where proficiency declined by 1% and 3%, respectively. The biggest jump in proficiency was in fifth grade, where the percentage of students scoring proficient jumped 9 percentage points. That is despite a large decline in the numeric mean score in 5th grade.

Because the tested material changed and the test scale was shifted, it is difficult to say if the score changes and proficiency changes were due to changes in student performance, changes in the scoring, or a combination of those and other factors.

Three of eight State Board of Education members voted against lowering the cut score that determines which students are reading below grade level. Those members expressed concern that students who weren’t prepared for the next academic level would be promoted and find themselves far behind and without the literacy support available in the early grades.

However, the majority of board members expressed support for following the advice of testing experts, recognizing that students this year were essentially taking a new test that required a new evaluation of results. Even with the lower cut scores, education officials are expecting a sharp increase in the number of students being required to repeat third grade in order to catch up in reading.

About half the states have some sort of retention provision. Alabama’s approach is modeled after Florida and Mississippi efforts. Both those states have seen large gains in reading on national assessment after implementing a systematic approach to literacy instruction.

Like those states, Alabama has dramatically increased funding and professional development for reading instruction and has especially targeted schools and systems with high concentrations of struggling readers.