Alabama Gov. Kay Ivey released her proposal Tuesday for how lawmakers should spend a record $8.8 billion from the Education Trust Fund budget for fiscal year 2024, which starts Oct. 1. The proposal reflects a 6.5% increase over the current year’s $8.3 billion education budget.

Included in Ivey’s proposal is a 2% pay raise for education employees, new investments in teacher recruitment, childcare, and more spending for laying the foundations of early grades learning required under the Literacy and Numeracy Acts.

Ivey’s proposal also includes big increases for childcare, and afterschool and summer learning programs.

The record-setting education budget is possible because of historic revenues, but state officials caution that that level of increases in the Education Trust Fund won’t last.

Finance Director Bill Poole told reporters the state should heed lessons learned from past economic downturns.

Read more: Ivey proposes $400 rebates for Alabama taxpayers, millions for school facilities

“We had times of historic budget revenues immediately preceding the Great Recession,” Poole said. “We know right now we are experiencing historic receipts levels. We know that those are not sustainable and they far exceed any measure of historical average.”

The Governor’s budget proposals have three themes, Poole said: Make targeted strategic investments, reduce debt and increase reserve accounts to buffer against future economic downturns.

Alabama Superintendent Eric Mackey said he is “very pleased” with the budget proposal while acknowledging K-12 education didn’t get the additional $900 million he hoped it would. He said he understands the need to be cautious in spending too much.

“It’s a big increase for K-12,” Mackey said. “It’s good to save some money because we are all a little worried, especially after the banking crisis that we’re kind of in the midst of, about what the next two or three budget cycles might look like.”

The 2% pay increase would raise starting salaries for teachers from the current $43,358 to $44,225, bringing Ivey’s goal of Alabama paying the highest starting teacher salary by the end of her term in 2027 a step closer.

Read more: Gov. Kay Ivey’s record budget request includes 2 percent pay raise for state employees

Calling the teacher pay raise “modest,” Poole said state officials deserve credit for implementing multiple raises over the past few years. He credited the governor and lawmakers for providing “modest, sustainable salary increases over the years rather than large swings as it relates to salaries to ensure, here again, that pay raises are sustainable.”

The biggest chunk of the education budget – $4.5 billion – will fund the state’s Foundation Program – the formula for funding K-12 schools. The Program includes teacher pay, classroom supplies, and pay for administrative and support personnel. The current year’s budget is $4.2 billion.

Other notable increases in K-12 spending under Ivey’s proposal are:

• A $26.6 million increase in transportation operations spending, far below the state board of education’s requested $100 million increase,
• $25 million increase for requirements of the Alabama Numeracy Act, where the goal is to improve math competency in kindergarten through fifth grade,
• $15 million in college and career readiness grants to improve access to those opportunities statewide,
• $6.5 million more for career coaches for schools, nearly doubling the current year’s $6.7 million allocation,
• A $3 million increase for the Computer Science for Alabama program, doubling the current allocation of $3 million.

Ivey’s proposal again funds the Underperforming Schools initiative with a $10 million allocation.

Mackey said Ivey’s priorities line up with the board’s priorities: Getting more money into the classrooms, getting a raise for teachers, getting more money for teachers for classroom supplies.

“Those things send the right message to teachers that we know teaching is hard, we know that they put a lot into it, and we want to reward them and show them we appreciate them.”

Ivey proposed a 4.5% increase in funding for the Department of Early Childhood Education’s budget – from $186.2 million to $194.6 million, with the bulk of the increase – $7.8 million – going to fund pre-K classrooms, according to Poole. The new funding will focus on expanding pre-K classrooms into at-risk areas of the state, he said.

Colleges and universities would receive a total of $1.55 billion – $102.8 million more over this year’s $1.45 billion – under Ivey’s proposal, with individual universities receiving between 5% and 10% more funding over the current year.

The Community College system would receive $549.3 million – $33.5 million or 6.5% more than this year’s $515.8 million.

Among proposals for spending for other agencies included in the ETF budget are a $30.1 million increase for the Department of Human Resources’ child care and afterschool program, nearly doubling the current year’s $33 million allocation.

The total $8.8 billion in spending for the 2024 ETF budget proposal breaks down like this:

• K-12 education – $5.98 billion, or 67.9% of the total,
• Higher education – $2.25 billion, or 25.6% of the total, and
• Other agencies and spending – $586.2 million, or 6.47% of the total.

Lawmakers are back in session after spending two weeks in a special session where they decided how to spend $1.9 billion in federal COVID relief funding.

Ivey also proposed plans for spending $2.8 billion in excess ETF receipts from 2022, a $3 billion budget proposal for the General Fund and the $200 million in surplus General Fund receipts from 2022.