The University of Alabama System finance committee approved the fiscal year 2026 operating budgets and a slate of finance resolutions at its Sept. 11, 2025, meeting, voting to adopt a combined system budget of $7.745 billion and authorizing distribution mechanisms for supplemental appropriations from the 2025 Alabama Legislature.

The budgets presented by Dr. Keith show University Hospital as the largest component of system revenues, increasing its share from 52% to 55% of the total. The presentation noted two major drivers of the year-over-year increase: a $622 million rise tied to University Hospital and a projected $46 million increase in state appropriations. “As one of the largest and most complex enterprises in our state, the University of Alabama systems…make a significant economic impact,” Dr. Keith said while presenting the proposed budgets.

Why it matters: the operating budgets set compensation, scholarship, operations and capital priorities across UA, UAB, UAH, University Hospital and the system office. The committee approved a distribution process for supplemental and Advancement & Technology appropriations from the 2025 Legislature, noting that universities must request reimbursement after expenses are incurred in accordance with Exhibit A of the resolution. The committee recorded appreciation for the budget staff’s responsiveness to trustee information requests.

Key actions and approvals
- FY2026 operating budgets for UA, UAB, UAH, University Hospital and the system office — approved. The combined proposed operating budget was presented as $7,745,000,000 for FY2026.
- Authorization to distribute 2025 supplemental and Advancement & Technology appropriations — approved; the system office will distribute funds and universities must request reimbursement per the resolution’s exhibit.
- Loan agreement: University of Alabama to execute a loan to Theta Zai fraternity to purchase equity in the chapter house at 401 Jefferson Avenue, total purchase price listed as $4,520,233. The resolution described funding from chapter reserves for part of the purchase and a university loan for the remainder at an annual interest rate of 5.5% over 30 years; the agreement includes default remedies and stated that Theta Zai has an approved business plan. The transcript does not specify the exact dollar amount contributed from chapter reserves.
- Line of credit: University of Alabama to provide a line of credit to the 18‑31 Foundation (a UA affiliate) to cover required payments on the Clare Verner property due to HUD requirements. The line allows up to $1,000,000 per year for four years and not to exceed $4,000,000 in the aggregate; title to the property will revert to UA when obligations are satisfied — approved.
- UAB capitalization threshold: UAB’s equipment capitalization threshold was increased from $5,000 to $10,000 effective Oct. 1, 2025. Campus staff said the change follows April 2024 OMB guidance and will be applied prospectively to assets purchased on or after Oct. 1, 2025; assets previously capitalized in the $5,000–$9,999 range will remain on inventory until fully depreciated. Trustee Simon asked whether the change affects accounting presentation; staff replied it will reduce annual depreciation expense going forward and will show a lower amount of capital assets on future balance sheets, with a slight increase in operating expense for supplies purchases.
- UAB Health System account and signatories: the committee approved creation of a new Regions bank operating account for “UAB Saint Vincent’s Regent ASC JV LLC” to hold short-term excess operating funds, with Don Belgarella and Susan Jennings designated with primary authority and transaction authority for the account — approved.

Discussion versus decisions: Committee discussion was largely limited to clarifying presentations by Dr. Keith and campus finance staff and brief trustee questions about accounting effects. Formal outcomes were approvals recorded by voice vote; the transcript records the chair saying “All in favor… say aye” and “The resolutions are approved,” but no roll-call tallies were provided.

Next steps: Implementation actions noted in the meeting include system-office distribution of appropriations under the reimbursement process in Exhibit A, the university executing the loan and line-of-credit documents as approved, and UAB implementing the capitalization-threshold change prospectively on Oct. 1, 2025.

Quotes
"As one of the largest and most complex enterprises in our state, the University of Alabama systems…make a significant economic impact," Dr. Keith said while presenting the budgets.
"Credit to Dr. Keith, her staff, and the CFOs and their staff," Chair Gray said during committee remarks acknowledging the budget team's responsiveness.

Ending: The committee approved the finance resolutions and adjourned to the next committee business. Implementation of the approved actions is subject to the requirements and conditions stated in each resolution, including the reimbursement procedures for supplemental appropriations and the legal terms of loan documents.