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Lawmakers warned Alabama faces a tighter fiscal outlook as interest revenue wanes
Summary
Fiscal staff told the Joint Interim Committees that recent one-time interest income that buoyed budgets is evaporating, putting pressure on the general fund and making 2028 especially risky without policy changes or new revenue.
Legislators were warned on the opening day of the Joint Interim Committees budget briefings that Alabama is "about to have a different fiscal environment," a phrase used by fiscal presenter Kirk Fulford as he opened a wide-ranging look at state revenues and risks.
Fulford, of the Legislative Fiscal Office, told members that an unusually large and temporary source of revenue — interest earned on state deposits — has materially supported recent budgets but will not persist. "Interest on state deposits is going to drive our discussion for '26 and '27," he said, noting the line jumped from roughly $40 million in 2022 to several hundred million in subsequent years and now accounts for "over 14% of the…
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