Due to a new higher standard, the number and percentage of third graders who failed to meet the grade-level reading benchmark rose in 2025. However, taking the higher standard into account, this year’s third graders showed continued improvement, indicating that the state’s focus on improving early grades literacy is continuing to pay dividends.

This spring, 11.6% of students failed to reach the benchmark on the Reading portion of the state’s standardized test, the Alabama Comprehensive Assessment Program (ACAP). Had the higher bar been in place in 2024, 13.7% of 3rd graders would have scored below the cut. In 2023, 20.8% of 3rd Graders would have scored below the cut.

Printable PDF available here.

In 2025, more students, 49,460, cleared the bar despite the higher standard. At the same time, more students, 6,470, fell below the reading sufficiency benchmark. The 2025 cohort of third graders is larger than previous years. That could mean more students will be required to repeat third grade. However, students who scored below the benchmark are offered intensive summer instruction, retesting, and alternative ways to qualify for promotion.

Improved performance

For the second year, the biggest gains in the percentage of third graders clearing the reading benchmark have occurred predominantly in rural school systems in the Black Belt. Those systems have high rates of economic disadvantage among students and have traditionally trailed other systems on various academic measures, but they have been making gains in reading.

This year, only 4% of Wilcox County students scored below grade level. That puts the system in the top 20 for performance, even though 91% of students in Wilcox County are economically disadvantaged.

Two systems, Orange Beach and Satsuma, had all their tested third graders reading on grade.

Breaking the Connection Between Poverty and Poor Reading Performance

While there is still a correlation between higher levels of economic disadvantage and high rates of reading struggles, the relationship has gotten weaker over time, with more high-poverty systems, particularly in rural areas, improving performance.

Other high-poverty systems, often in urban areas, are still struggling to close the gap. Large urban systems like Montgomery County and Birmingham City have higher concentrations and larger numbers of students testing below grade level. However, those systems also have magnet schools where all students achieved the reading benchmark. Within larger school systems, schools with similar demographics vary significantly when it comes to reading results.

The scatterplot chart below compares the percentage of students in the school who are below grade level on reading to the percentage of students from economically disadvantaged households. The higher on the chart a system is, the better its reading performance. The systems shaded green and lying to the right are schools with lower economic disadvantage. The size of the system’s circle corresponds to the number of third graders who failed to achieve the reading benchmark.

Schools

Despite the higher bar, in 42 schools, all third graders who were tested passed the reading benchmark. That included Princeton Elementary in the Birmingham system and three schools in the Montgomery County System: Bear Exploration Center, Macmillan International at McKee, and Forest Avenue Elementary School. The schools where all third graders met the benchmark ranged from Georgiana, where 86% of students are from economically disadvantaged households, to Mountain Brook and Crestline elementary schools, where only 2% of students are economically disadvantaged.

The two schools with the largest number of third graders who are below grade level in reading are virtual schools: the Alabama Virtual Academy at Eufaula City Schools, where 421 students, or 37%, failed to make the benchmark, and the Alabama Connections Academy of Limestone County, where 290 students, or 32% scored under the benchmark.

For Students Who Failed to Score At or Above the Benchmark

The 6,480 students who failed to reach the benchmark are in jeopardy of being required to repeat 3^rd grade, under the terms of the Alabama Literacy Act. However, there are several routes for promotion to the fourth grade.

Students who failed to clear the new reading sufficiency benchmark have access to intensive summer literacy camps sponsored by local school systems. After the intervention, they will be able to retest.

If they still fail to clear the bar, teachers and school officials have alternative means for evaluating the students’ reading skills. Other good-faith exemptions exist. In 2024, 4,808 students failed to pass the reading sufficiency benchmark. After retesting and applying exemptions, only 452 students were retained due to the Literacy Act, according to the Alabama Daily News reporting.

Second Grade Results

Also included in the data release were second-grade results. The cut score also went up for second grade. The second-grade score is intentionally set at a higher threshold so that more students who might be encountering reading struggles can be identified and receive intervention. Due to the higher bar, more students failed to meet the grade level sufficiency benchmark, 19% in 2025 compared to 17% in 2024. The 10,423 second-grade students who scored below the benchmark were encouraged to attend summer literacy camps and should receive special attention throughout their third-grade year.

Background

The intense interest in 3rd-grade reading is the result of the 2019 Literacy Act. The Act was modeled on similar legislation enacted in Florida and Mississippi. Both of those states saw large gains in reading performance on national standardized tests. The laws are based on the premise that students have to be reading on grade level by fourth grade. Students are taught to read from Kindergarten through third grade. In fourth grade, students are expected to read material to learn.

Numerous studies have found that students who aren’t reading on grade level by fourth grade are more likely to struggle academically and fail to complete high school. Low literacy skills are associated with difficulties in the job market and poor health outcomes.

While the Literacy Act’s grade retention provision received attention, the more consequential portions of the bill were its increased investment in improving literacy instruction, early screening for reading difficulties, and requirements for interventions and communication with parents. The Act re-energized the Alabama Reading Initiative and led to statewide training of teachers in techniques grounded in the science of reading.

Since implementation, Alabama has seen various measures of reading performance rise. Alabama is one of only two states (Louisiana is the other) in which 4th-grade students are performing better in reading than before the COVID-19 pandemic, according to the 2024 National Assessment of Education Progress (NAEP).  

Alabama’s public high school graduation rate tied its all-time high in 2024, while the Class of 2024 also set a new record for the percentage of graduates designated ready for college and career, according to new data released by the Alabama Department of Education.

Among 2024’s senior class, 88% had earned a college and career-ready (CCR) designation, a jump of 4 percentage points over the rate for the Class of 2023. That progress also narrows the gap between the graduation and CCR rates to 4 percentage points, the smallest gap ever.

Printable PDF available here.

Alabama’s high school graduation rate has been rising since 2012, when the state set a goal that 90% of ninth graders would persist and graduate four years later. As the state’s public schools made progress toward and ultimately achieved that goal, policymakers focused on the gap between the graduation and CCR rates. Though more students were graduating, many weren’t leaving with the credentials to prove they were ready to enter college or the workforce.

In 2023, the Alabama Legislature passed a law requiring that by Spring of 2026, all graduates will have to have earned a CCR designation in order to receive a diploma. Schools have been moving toward that goal. In 2024, over 50 high schools reported a 100% graduation rate, and more than 40 reported a 100% college and career readiness rate.

Multiple Ways to Demonstrate College and Career Readiness

The Class of 2024 produced a jump in the on-time graduation rate and in multiple categories of college and career readiness.

School systems and high schools have different approaches to providing students with pathways to the CCR designation. Academic magnet schools and affluent suburban systems have higher percentages of students scoring college-ready on the ACT or by earning a qualifying score (3 or above) on an Advanced Placement test. Advanced Placement (AP) courses are college-level courses taught by high school faculty. International Baccalaureate (IB) courses are similar and also count toward CCR. Other schools, usually cooperating with the local community college, may give most students access to college courses. Many schools encourage enrollment in career technical education courses and reach over 90 percent of students through such offerings. Successful entry into the military and completing an approved youth apprenticeship is also an option.

Career Technical Education

More students are participating in career technical education courses, high school courses linked to career skills and training. The number and percentage of students demonstrating college and career readiness through completing a course in career technical education and earning an industry-recognized credential rose to 24,535, up from 21,640 in 2023. In the class of 2024, 47% of students earned a credential that should be recognized as valuable to a prospective employer, a 6-percentage point increase. 

Dual Enrollment

The number and percentage of students earning college credit, mostly through dual enrollment at a community college, also rose substantially from 21% of students in 2023 to 26% for the Class of 2024. Statewide, 13,891 students had earned credit through successfully completing a college course during high school, an increase of over 2,500 from the Class of 2023.

ACT

The percentage of Alabama public high school graduates earning a benchmark score on the ACT rose to 42%, up from 40% in 2023. ACT, the standardized test that predicts student readiness for college-level coursework, is given to all high school juniors. Scores in Alabama and nationwide dropped during and following the pandemic. In Alabama, performance is improving, though still below pre-pandemic highs. A full exploration of the Alabama ACT scores can be accessed in PARCA’s previous post, Alabama High School Class of 2024 Improves on ACT.

WorkKeys

ACT also produces a second standardized test, WorkKeys, through which students can demonstrate college and career readiness. WorkKeys is designed to test reading and math skills as they are applied in the workplace. WorkKeys is given to seniors and is optional. Students who score high enough on WorkKeys to earn a silver, gold, or platinum certification are considered adequately prepared to enter the workforce.

Some employers use WorkKeys as a factor in hiring decisions. The visualization below allows you to explore WorkKeys results in terms of certificates earned and trends in the number of students tested. However, bear in mind that different schools use the test differently and give it selectively, so comparisons between schools and systems can be misleading.

Explore Further

Using the tabs and menus in the visualization tools, you can explore results for your local system or school. For best results, use the full screen option to display the visualization. That button can be found on the bottom right of the visualization, next to the share button.

Bear in mind that some schools may have college—and career-ready rates that exceed graduation rates. This occurs when more seniors achieve one of the measures of college and career readiness than earn a diploma.

Passage of the One Big Beautiful Bill Act (H.R. 1) in the U.S. House has sparked discussions about the impact of reductions in federal funding across the U.S. KFF, a nonprofit policy analysis organization formerly known as Kaiser Family Foundation, estimates that the House Budget Committee’s reconciliation bill would reduce federal Medicaid spending by $791 billion without accounting for interactions that would lower estimates to $723 billion. Almost 85% of the total savings derived from five features:

• Mandating work and reporting requirements ($280 billion),
• Repealing rules simplifying Medicaid eligibility and renewal ($167 billion),
• Creating a moratorium on new or increased provider taxes ($89 billion),
• Revising state-directed payment limitations ($73 billion), and
• Increasing the frequency of eligibility re-determinations for the ACA expansion group ($53 billion).

Approximately $357 billion of the reductions would only apply to states that adopted ACA expansion.

Printable PDF available here.

Federal cuts to states of $723 billion over 10 years would represent 11% of federal spending on Medicaid over the period. KFF estimates that the cuts range from 5% in Alabama, Wisconsin, and Wyoming to 15% in Washington, Louisiana, and Illinois.

Congressional Budget Office estimates a 10.3 million loss of Medicaid enrollment by 2034, representing 12% of projected enrollment in that year. At the state level, the largest reductions in Medicaid enrollment would be in Washington and Virginia, decreasing by 25% and 20%, respectively. In Alabama, that would be about 4% or approximately 47,000 people.

As described in a previous post, Alabama receives more than $60 billion in federal transfer payments to individuals from Social Security, unemployment benefits, educational benefits such as Pell Grants, or as payments on behalf of individuals in Medicare or Medicaid, etc.

As the Economic Innovation Group noted in its report, The Great Transfer-mation: How American Communities Became Reliant on Income from Government, the main reason federal transfers have increased is the increase in the percentage of the population over the age of 65. Other economic factors have contributed to a reliance on federal transfers, particularly in rural areas with declining economic conditions.

Currently, among the transfer payments are approximately $15.5 billion (2022) to medical providers on behalf of Medicare recipients and another $7.6 billion (2022) on behalf of Medicaid patients, including covering approximately 44.7% of births in Alabama in 2023. Rates vary dramatically across counties, with 78.6% of births in Wilcox County covered by Medicaid to a low of 23.3% in Shelby County. Georgetown University’s McCourt School for Public Policy found that many small towns are dependent on Medicaid/CHIP funding. With 48.6% of children in rural areas of Alabama enrolled in 2023, the state ranks 12^th in the nation on that metric.

This past legislative session, the Alabama Legislature passed Senate Bill 102, expanding Medicaid benefits for pregnant women “with an estimated addition of $1 million annually for fiscal years 2026, 2027, and 2028, consisting of $726,300 in federal funds and $273,700 in state funds, by providing certain prenatal coverage to women found presumptively eligible by a qualified provider.” Governor Kay Ivey signed the bill on May 1.

Many medical facilities in Alabama depend on federal funding from Medicaid and Medicare patients. According to KFF, Medicare covered 63% of certified nursing facility residents in Alabama, while Medicaid covered approximately 13%, with only 24% covered by other private funding sources.

For the 80 hospitals in Alabama, operating margins were approximately 2.9% in 2023. However, they are generally thinner in poorer rural areas of the state. Nationwide, operating margins in rural hospitals are notoriously thin, with 44% of rural hospitals operating in the red. According to KFF, “As of July 2024, Medicaid was the primary payer for 63% of nursing facility residents; Medicare for 13% of residents; and the remaining 24% of residents had another primary payer (ex. private insurance, out-of-pocket, etc.) Medicare does not generally cover long-term care but does cover up to 100 days of skilled nursing facility care following a qualifying hospital stay.” 

In states without Medicaid expansion, just over half (53%) of rural hospitals operate in the red. Reductions in Medicaid or Medicare could have a significant impact on rural hospitals. KFF reports that rural hospitals had an average operating margin of 1.7% in 2023. Reductions in these amounts, whether direct payments to individuals or payments on behalf of recipients, as in the case of Medicaid and Medicare, would reduce, dollar for dollar, the purchasing power in those communities.

Using the slider and program selector in the visualization below, estimates of how a percentage decrease for each kind of transfer can be adjusted to find dollar amounts for hypothetical decreases:

Alabama is not alone. The same kind of dependence can be seen across the country.

There are common patterns across the places where economic activity has been challenging, including the Texas Valley, the Mississippi Delta, Appalachia, and tribal territories. Still, many communities have aging populations, with high percentages of transfer payments compared to earned personal income, as shown below:

For details on the calculation of personal income and transfer payments, see this post on Github:
https://github.com/EIG-Research/EIG-Great-Transfer-Mation

New population estimates from the U.S. Census Bureau place Mobile as the state’s second-largest city, behind booming Huntsville and ahead of Birmingham and Montgomery, both of which saw population declines according to the most recent estimates from the U.S. Census Bureau.

Mobile’s new status takes into account the city’s 2023 annexations of neighborhoods in Mobile County that were expected to add about 20,000 to the city’s population. According to revised Census estimates, the city jumped from less than 190,000 before 2020 to almost 210,000, pushing it well ahead of Birmingham which, for 2024, had an estimated population of 196,818.

Printable PDF available here.

However, despite its annexation bump, Census estimates show Mobile is still losing population, dropping by over 500 over the past year to an estimated 201,367. Birmingham and Montgomery are also continuing to see population declines. If current trends prevail, the three cities seem destined to continue jockeying back and forth. Currently, the population estimates have Birmingham in third, just in front of Montgomery, at 195,818.

The biggest surprise of the estimates was the small Jefferson County hamlet of Brookside, which had the highest population growth rate of any municipality in the state at 13.2%. The town added 158 residents, bringing its total to 1,357 residents. The town has a new neighborhood under construction that appears to be drawing new residents. Small towns and cities around Huntsville and in Shelby and St. Clair counties, outside of Birmingham, saw higher rates of growth in percentage terms, as did suburban cities around Montgomery. Small towns in Wiregrass surrounding Dothan and Enterprise also showed growth in percentage terms. And several Baldwin County communities ranked near the top in terms of percentage growth.

In terms of growth in numbers, the city of Huntsville is the state champ, drawing in another 4,174 new residents in 2024. The City of Madison, Huntsville’s suburban neighbor, added 3,007, ranking third in the state in numeric growth, and Athens, which also borders Huntsville, added 1,641, ranking fourth.

The City of Foley in Baldwin County grew by 3,012, ranking second in the state in numeric terms and tying for second in percentage growth at 12%. Foley’s fellow Baldwin County city of Loxley also grew 12%. Fairhope added 1,011 according to the estimates, ranking 8th in the state. Gulf Shores and Daphne also ranked in the state’s top 20 in the number of residents added.

Cross state rivals Tuscaloosa and Auburn continue to grow with Auburn adding 1,310 to edge out Tuscaloosa’s gain of 1,272 new residents. Auburn also has the secret weapon of Opelika next door, which added 1,313 new residents in 2024. That far outpaces Northport which grew by 280. Together, Tuscaloosa and Northport have about 150,00 residents compared to Auburn and Opelika’s 120,000.

The sharp drop in overdose deaths in 2024, both nationally and in Jefferson County, wasn’t an accident, according to members of the task force that works to combat the epidemic of drug-related deaths. Instead, it resulted from public policy changes and the geographically targeted deployment of resources.

Figure 1. Trends in Accidental Drug and Opioid Overdose Deaths in Jefferson County, 2012-2024. Source: Jefferson County Coroner’s Office data.

Printable PDF available here.

Thanks to those interventions, Jefferson County saw its first decline in overdose deaths since 2018. According to data from the Jefferson County Coroner’s Office, drug overdose deaths peaked in the county in 2023, with 483 accidental drug-related deaths. That is more than double the number of people who died by homicide (197) in Jefferson County in 2023. And it is more than triple the number of overdose deaths Jefferson County experienced in 2012.

Accidental overdose deaths from opioids began rising in the 1990s with the proliferation of prescription pills. That was followed by a resurgence in heroin use, which was in turn followed by the arrival of fentanyl, an extremely potent synthetic opioid. Beginning in 2020, traffic fentanyl surged into Jefferson County, resulting in a skyrocketing death toll from overdoses.

In Jefferson County, the arrival of fentanyl hit the Black community especially hard. Historically, White deaths from drug overdoses had greatly outnumbered Blacks. But by 2023, Black overdose deaths eclipsed whites.

Figure 2. Trends in Overdose Deaths By Race, Jefferson County. Source: Jefferson County Coroner’s Office data.

Health officials nationally and in Alabama have been working to catch up with the epidemic. In 2017, Governor Kay Ivey established the Alabama Opioid Overdose and Addiction Council, which pulled together the state departments of Public Health and Mental Health, local health providers, and a broad coalition of health care providers, drug treatment non-profits, and first responders. Much of the coordinating and data-gathering work has been funded by the Centers for Disease Control and Prevention and its Overdose Data to Action grant program. According to the CDC, factors driving the decline in overdose deaths include the “widespread, data-driven distribution of naloxone, which is a life-saving medication that can reverse an overdose; better access to evidence-based treatment for substance use disorders; shifts in the illegal drug supply; a resumption of prevention and response after pandemic-related disruptions; and continued investments in prevention and response programs like CDC’s flagship Overdose Data to Action (OD2A) program.”

OD2A funding to the Alabama Department of Public Health and the Jefferson County Department of Health has supported the creation of a data-gathering and sharing program that is providing real-time information about where overdoses are occurring. Emergency medical services providers and hospitals are reporting overdose encounters as they happen, allowing public health officials to zero in on communities and even specific neighborhoods where overdoses are on the rise. Jefferson County’s Health Department has worked with the Jefferson County Coroner’s Office, health care providers, and researchers at the University of Alabama at Birmingham and other local agencies to gather, analyze, and act on the data.

With the data mapped and analyzed, partners from the healthcare and treatment community, first responders, and public health officials routinely meet to discuss patterns and develop a concerted approach to overdose prevention. Figure 3 shows the concentration of overdose deaths by zip code, for the peak year, 2023. Using the slider and directional arrows, you can cycle through years of data to see the rising numbers and shifting geographic concentration.

Figure 3. Mapping Overdose Deaths By Zip Code, by Year. Source: Jefferson County Coroner’s Office data.

Policy changes identified and lobbied for by the Overdose and Addiction Council set the stage for the interventions that appear to be driving down deaths. First, in June of 2022, the Alabama Legislature decriminalized Fentanyl test strips. Before the change, the strips that allow the detection of potentially fatal levels of the drug were considered drug paraphernalia, discouraging their availability and use.  Then, in March 2023, naloxone was made an over-the-counter medication, increasing access to the overdose-reversing treatment and allowing for distribution in the community.

In the wake of the changes and with an influx of funding from both federal and state opioid settlement money, a coalition of groups pushed out resources and training to make the life-saving resources available. The Alabama Department of Mental Health significantly increased naloxone distribution, distributing 46,482 kits at Back-to-School events, End Addiction Walks, and conferences and trainings for treatment providers serving high-risk individuals, local and rural law enforcement officers, and first responders. JCDH has an online Naloxone education portal on its website, www.jcdh.org, and sends Naloxone Kits and Fentanyl Test Strips by mail at no cost to people who request the kits through the website. In addition, JCDH provides both products through dispensing boxes at its health centers and at distribution boxes in other community locations.  JCDH also partners with local EMS, police, fire and rescue, and some independent pharmacies to provide the supplies as well.

Using Jefferson County Coroner’s data, the Jefferson County Health Department identified particular neighborhoods where overdose deaths were on the rise. To counter the trend, the department found avenues to distribute free Naloxone and Fentanyl test strips. They also launched public information campaigns, advertising the dangers of the drugs and resources for treatment services, in some cases, displaying the messages on the public transit buses that served the affected areas.

Jefferson County Health Officer Dr. David Hicks applauded the cooperation and the progress but stressed the need to sustain the effort.

“As we continue to address the challenges posed by overdose deaths in our community, it is crucial to recognize the progress we have made and the work that still lies ahead,” Hicks said. “Our collective efforts in prevention, education, and treatment are making a difference, but we must remain vigilant and committed to saving lives. Together, we can build a healthier and safer Jefferson County.”

PARCA is involved in an effort to encourage similar efforts to share, analyze, and act on data. The Birmingham-Jefferson County Justice Governance Partnership brings together county government, municipalities, multiple law enforcement agencies, schools, health providers, non-profits, and community groups to develop a common understanding and cooperative solutions to community challenges. For more information, visit the BJC-JGP website.

Alabama relies on federal spending—Alabama residents do, too.

Alabama residents receive over $60 billion from the federal government—23% of all personal income.

These figures are based on a September 2024 report, The Great Transfer-mation: How American Communities Became Reliant on Income from Government, by the Economic Innovation Group (EIG).

These payments, known as transfer payments, include Social Security, Medicare, Medicaid, veteran’s benefits, unemployment, Pell Grants, and others.*  The report explains how an aging population and shrinking economic opportunities have shifted many communities into reliance on these transfer payments.

To put the $60 billion in perspective, Alabama’s four automakers generate $6.4 billion in total compensation, according to a report from Autos Drive America and the American International Automobile Dealers Association, as reported by al.com. That’s about one-tenth of the amount received from federal transfer payments.

In other words, a 10% reduction in these payments would have a similar economic effect on personal income as shuttering Alabama’s entire auto industry.

The impact is more pronounced in rural areas. The EIG report notes, “The transfer share of total personal income tends to run much higher in rural areas than in large population centers.” Looking at Alabama, this appears to be a consistent pattern, with most urban counties with low income from federal transfers and rural counties with higher percentages of income from federal transfers.

These trends evolved over decades, having a widespread economic impact that has grown steadily as the population ages.

Meanwhile, these programs are under increasing scrutiny in the current administration. Reducing them would have a profound impact on local communities.

Explore the chart below to see the amount of transfer payments in each county and the share of total income those payments represent. 

*Some of these payments, like Social Security, are made directly to individuals. Other payments, such as Medicare and Medicaid, are made to providers to pay for services on behalf of individuals.

For details on the calculation of personal income and transfer payments, see this post on Github:
https://github.com/EIG-Research/EIG-Great-Transfer-Mation.

PARCA is re-examining Alabama’s Constitution in light of the 2022 passage of a revised and reorganized version of the state’s fundamental law.

The approval of the Constitution of 2022 was the culmination of decades of advocacy. Some important changes were achieved, including a substantial reorganization and the removal of racist and unconstitutional provisions central to the spirit of the state’s 1901 Constitution.

And yet, the Alabama Constitution of 2022 maintains the fundamental shackles on government from the 1901 Constitution. Embedded in the Constitution is a tax system that is inadequate, inefficient, and inequitable.

Since the early 1990s, PARCA’s How Alabama Taxes Compare analysis has found that Alabama state and local governments consistently collect less per capita in taxes than almost all other states. After occupying the bottom spot for most of the past 30 years, Alabama has traded back and forth with Tennessee for last place since 2018. This year, Tennessee’s per capita collections came in $4 lower than Alabama’s, resulting in a rank for Alabama of No. 49.

Alabama continues to collect less per capita in state and local property taxes than any other state. Property taxes are strictly limited by provisions in the state constitution.

Low taxes create some advantages. Low property taxes on land and homes are attractive in some regards, decreasing the cost of homeownership and shielding rural land and farms from development pressure. Lower taxes also can be attractive to businesses and individuals moving to the state.

However, low property taxes come at a cost, creating a greater reliance on other taxes, mainly sales taxes. Those sales taxes put a particular burden on low-income Alabamians. Low tax collections also mean that Alabama state and local governments have less to invest in services such as education, health, public safety, and the justice system. That is in a state with high poverty rates, low educational attainment, poorer health outcomes, and higher rates of violent crime than most other states. In turn, high poverty and less economic activity mean less wealth to tax and, thus, lower tax collections.

Inadequate

In contrast to other states, where the state legislature and local governments generally have the power to adjust tax rates, Alabama’s constitution sets limits, rates, and procedural restraints on state and local taxes. That makes taxes hard to raise, adjust, or rebalance. In the end, Alabama’s lower base of wealth and structural and cultural resistance to taxes mean that governments here have less to spend on providing vital public services, placing Alabama in the bottom ten states in most spending categories.

Continue reading the full report here: The Alabama Constitution’s Impact on Taxes and Spending

———-

This report is one of a series of reports examining Alabama’s current constitutional framework, identifying remaining obstacles to a modern constitution and possible paths forward in areas such as education, economy, healthcare, democracy, liberty & justice, finances, and related areas. Other reports in the series include The Government Closest to the People? The Statehouse, the Courthouse and City Hall and How Alabama Democracy Compares.

The project is supported, in part, by the Alabama Citizens for Constitutional Reform (ACCR). Both ACCR and PARCA are nonpartisan organizations, and our members and supporters are Republicans, Democrats, and independents. Former Governor Albert Brewer and former Samford University President Thomas Corts, both deceased, were founding leaders in both organizations.

Leaders from city and county government, education, philanthropy, social services, and community are launching a new partnership to decrease violence and increase health and opportunity in Jefferson County.  

Coming in the wake of a record-setting year for homicides in the City of Birmingham, the Birmingham-Jefferson County Justice Governance Partnership (BJC-JGP) seeks to build a coordinated and sustained effort to understand and address the conditions that give rise to violence and the underlying vulnerabilities of the neighborhoods where violence is concentrated. The partnership grows out of a recognition that law enforcement alone cannot solve the problem and that community members and an array of agencies play a part in the solution.    

The Justice Governance Partnership is being launched with the support of the Aspen Institute’s Criminal Justice Reform Initiative (CJRI). The Aspen Institute is a nonpartisan educational and policy studies organization based in Washington, DC. Aspen is known for convening thought leaders from across the country to address complex public policy problems. Its Criminal Justice Reform Initiative brings together national experts in criminal justice, education, and budgeting with the aim of helping local communities develop more effective approaches to public safety. 

Birmingham is among a handful of communities piloting the Justice Governance Partnerships model. Aspen’s CJRI is also working with Grand Rapids, Michigan, and in rural South Carolina, and North Charleston, S.C. 

The formal launch of the JGP follows the release of the Birmingham Crime Commission Report, commissioned by Mayor Woodfin. The commission’s report called for the implementation of evidence-based violence reduction strategies, community engagement and investment, and sustainable governance to implement, monitor, and maintain short-term and long-term solutions. 

The Justice Governance Partnership serves as a vehicle for cooperating around implementation and monitoring progress. Partners across the cooperating organizations provide wide-ranging data to produce a Justice Audit, which quantifies conditions and identifies needs. The Audit is regularly updated to track progress.  

Meanwhile, the ultimate goal is to devise a Justice Reinvestment Plan, which identifies preventive investments that can improve neighborhood conditions and drive down the need for costly emergency responses. The Audit and Reinvestment Plan are tools that aim to identify actionable solutions to improve economic conditions, address violence, and mitigate other risk factors at the local level, focusing on under-served neighborhoods. 

About the Birmingham-Jefferson County Justice Governance Partnership 

The Birmingham-Jefferson County Justice Governance Partnership is a coalition dedicated to fostering a transparent, equitable, and effective justice system in Birmingham and Jefferson County. Through collaboration, policy innovation, and community engagement, the BJC-JGP seeks to address systemic challenges and create lasting change for the benefit of all residents. For more information, visit parcalabama.org/bjc-jgp.

Each year, PARCA uses data from the U.S. Census Bureau’s Annual Survey of State and Local Finances to compare Alabama’s tax collections to the other 50 states. The most recent data comes from the 2022 Fiscal Year. 

Key Findings from this year’s report, How Alabama Taxes Compare, 2024:

• In FY 2022, adjusted for population, Alabama collected less in state and local taxes than all but one other state, Tennessee. 

• 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 on providing 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., compensating for low property taxes.  

• Alabama’s income tax does not provide the balancing effect 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. 

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

For most of the past thirty years, Alabama has consistently ranked last in the Southeast and last in the U.S. in terms of per capita tax collections. In recent years, Alabama has traded that last-place spot back and forth with Tennessee, thanks to tax-cutting measures in that state. This year, according to the Census survey, Tennessee returned to the bottom spot, collecting $4 less per capita than Alabama. Tennessee’s income tax on dividends continues to decrease as the state phases it out.

Read the full report below or click the link here.

Alabama voters adopted a revised and reorganized Constitution in 2022.

However, the “new” Constitution preserved the fundamental attitudes and mechanics of the previous Constitution.

Adopted in 1901, that constitution was designed for an agrarian state, strictly limiting government power to tax land. It forbade the state from engaging in “internal improvements” and disenfranchised blacks and poor whites. Some of those provisions were loosened through amendments over time. Others were found unconstitutional and struck down by the federal courts.  

But one of the essential elements remains its concentration of power in the state government, the Legislature in particular.

Local governments were granted only the powers the Legislature or the Constitution explicitly permitted.

The ruling elite of the time looked with disdain at local government officials. Thomas L. Bulger of Dadeville, a delegate to the Constitutional Convention of 1901, expressed the prevailing attitude during the constitutional debates:

“No gentleman on this floor will contend that his Commissioners’ Court at home is more capable of legislating for the people of his county than the General Assembly, composed of 100 select men,” Bulger said.

And thus, to this day, a sizeable portion of the state Legislature’s business pertains to matters that are specific to particular counties or cities, not the state itself.

More than 35,000 local laws govern everything from local taxes to whether a sheriff’s deputy can keep his gun and badge upon retirement. Over time, in a confusing and convoluted process, the Constitution was amended over 1,000 times to meet the needs of modern life, swelling the document into the longest state constitution in the nation. It is believed to be the world’s longest constitution, and even with the 2022 reorganization, it will continue to grow.

The bulk of the state’s fundamental law is now made up of exceptions and exemptions to the general framework and principles a constitution is supposed to enumerate. Two-thirds of Alabama’s constitutional amendments apply to individual cities and counties. In effect, every county has its own version of the Constitution. And counties and cities still must ask the Legislature for the tools they need to manage basic affairs.

In many ways, though, the lack of home rule in Alabama reflects how Alabamians feel about government. They want limited government. They want limits on taxation. They do not trust governments to carry out their wishes. And they want to be left alone.

That is, until they demand that government step in and solve a problem. And, often, that requires a trip to Montgomery.

The balance of power and responsibility between state and local officials is an eternal struggle.

In the 1901 debates, Bulger was answered by John A. Rogers of Gainesville in Sumter County, who asked:

“Why is it that these people can select such fine representatives to the Legislature, and yet it is feared that they won’t be able to select satisfactory County Boards to handle these matters?”

Perhaps in the 21^st century, it is time to revisit Roger’s thoughts and consider whether the same voters who elect Alabama legislators to enact state policy can be trusted to vote for local officials from their own communities who will reflect citizen wishes on local matters.

Read the full report here: The Government Closest to the People? The Statehouse, the Courthouse and City Hall.

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This report is one of a series of reports examining Alabama’s current constitutional framework, identifying remaining obstacles to a modern constitution and possible paths forward in areas such as education, economy, healthcare, democracy, liberty & justice, finances, and related areas.

The project is supported, in part, by the Alabama Citizens for Constitutional Reform (ACCR). Both ACCR and PARCA are nonpartisan organizations, and our members and supporters are Republicans, Democrats, and independents. Former Governor Albert Brewer and former Samford University President Thomas Corts, both deceased, were founding leaders in both organizations.