An In-Depth Look at Alabama’s State Revenue (2025 Edition)
If you’ve been wondering “How much money does the state of Alabama make a year?”, you’re not alone. Behind the scenes, Alabama’s revenue comes from a combination of state-collected taxes, budget funds, and federal contributions. Let’s break down the latest figures to give you a comprehensive and clear answer.
1. State-Collected Revenue: General & Education Trust Funds
For Fiscal Year 2026, Alabama’s General Fund is projected to generate approximately $3.4 billion, while the Education Trust Fund is expected to bring in around $11.1 billion.(AP News, NASBO)
- The General Fund—which supports healthcare, corrections, public safety, and more—is estimated to see a slight revenue decline of 1.7% from the previous year, but still totals about $3.4 billion.(NASBO)
- The Education Trust Fund—which funds K‑12 schools, community colleges, and higher education—anticipates $11.1 billion in revenue, a 1.8% increase over the prior year.(NASBO)
Total state-collected revenue for FY 2026 is therefore estimated at around $14.5 billion.
2. Annual State Tax Collections (2024 Data)
According to the Federal Reserve Economic Data (FRED) report, Alabama’s total state government tax collections for 2024 reached approximately $16.9 billion.(FRED)
These figures include major categories like sales, gross receipts, and property taxes, reflecting the broader tax base beyond just the two main funds.
3. Federal Funds Infusion
Alabama also receives significant financial support from the federal government. In Fiscal Year 2022, federal transfers to Alabama’s state and local governments totaled roughly $20.2 billion.(USAFacts)
This funding plays a crucial role in supporting education, infrastructure, healthcare, and more across the state.
Summary Table
| Revenue Source | Approximate Amount |
|---|---|
| State-Collected Revenue (FY 2026) | $14.5 billion |
| Total State Tax Collections (2024) | $16.9 billion |
| Federal Transfers (FY 2022) | $20.2 billion |
Why These Numbers Matter
- The combined $14.5 billion from state-collected funds—split between the General Fund and Education Trust Fund—provides transparency into how state priorities are funded.
- Tax collections, at nearly $16.9 billion, showcase the broader economic base supporting state programs.
- The $20.2 billion in federal transfers highlights how intertwined federal support is with state and local budgeting.
Final Thoughts
Alabama’s annual revenue highlights a multi-faceted funding structure:
- $14.5 billion from in-state budget sources (FY 2026)
- $16.9 billion in total tax collections (2024)
- $20.2 billion in federal transfers (FY 2022)
Together, these figures paint a holistic picture of how Alabama sustains its operations and invests in public services.
How Much Money Does the State of Alabama Generate Annually?