State budgets are diverging

One governor just signed a bigger education budget, while the biggest state in the country is arguing about whether its budget math works at all. In Alabama, Kay Ivey signed the fiscal year 2027 budgets on April 9, including an Education Trust Fund budget of about $10.5 billion and a General Fund budget of about $3.74 billion. (wdhn.com) (aldailynews.com) Alabama’s education budget is not just for kindergarten through twelfth grade schools. The Education Trust Fund also pays for higher education, and a state education group tracking the bill says the package appropriates about $10.47 billion for kindergarten through twelfth grade and colleges in fiscal year 2027. (aplusala.org) That same Alabama package includes specific add-ons instead of a broad austerity message. The fiscal year 2027 plan includes teacher pay raises, and the weighted student funding program called the Renewing Alabama’s Investment in Student Excellence Act rises to $191 million, up $25 million from last year. (wdhn.com) (aplusala.org) California is moving in the opposite direction. Governor Gavin Newsom’s proposed 2026-27 budget totals $348.9 billion in all funds, but the Legislative Analyst’s Office says the state still faces an almost $18 billion budget problem under its own revenue and spending estimates. (ebudget.ca.gov) (lao.ca.gov) The reason California keeps getting pulled back into budget fights is the way it collects money. A CalMatters commentary published on April 9 says California depends heavily on personal income taxes tied to capital gains, so stock-market swings and bonus income can make revenue jump in boom years and sag in slowdowns. (calmatters.org) That volatility collides with spending rules that do not shrink as fast as revenue does. The Legislative Analyst’s Office says constitutional spending formulas and higher program costs help explain why the 2026-27 budget problem is about $5 billion larger than the administration had anticipated earlier. (lao.ca.gov) So California’s debate has shifted from simple cuts to structural fixes. The same CalMatters piece argues for larger reserves in good years, while the Governor’s January budget calls for a required transfer of about $3.023 billion into the state’s rainy day fund even as the broader budget stays tight. (calmatters.org) (ebudget.ca.gov) On top of that, California is also fighting over a separate tax idea aimed at the ultra-rich. A proposed ballot initiative would impose a one-time 5% tax on the 2025 net worth of California billionaires, let them pay it over five years, and send 90% of the money to health care and 10% to kindergarten through twelfth grade education. (calmatters.org) (sos.ca.gov) The filing calendar shows how uncertain that money still is. The California Secretary of State’s initiative schedule says petitions tied to that billionaire-tax measure would need to be filed by July 6, 2026, which means none of that revenue exists for campuses trying to plan next year’s software contracts right now. (elections.cdn.sos.ca.gov) Put those two states side by side and the gap is not red state versus blue state. It is one state writing checks from a signed education budget and another state debating reserves, deficits, and a ballot tax before universities can know how much recurring money they will actually have. (wdhn.com) (lao.ca.gov) (calmatters.org) That split shows up fastest in boring purchases that still have to be paid every year. A college can buy an accessibility platform, a captioning contract, or a compliance system only if its state support looks durable enough to cover renewals, staff time, and maintenance after the first invoice lands. (aplusala.org) (lao.ca.gov)