Operating Funds -
The government for the State of Alabama operates primarily from six major funds.
State General Fund
Revenues credited to the General Fund are used for the ordinary expenses of the executive, legislative, and judicial departments of state government, for other functions of government, for debt service on certain general obligation bond issues, and for capital outlay. Taxes from over 40 sources are deposited into the GF, with the largest sources being the insurance company premium tax, interest on the Alabama Trust Fund, use tax, simplified sellers use tax, cigarette tax, ad valorem tax, and the Alabama Alcoholic Beverage Control Board profits.
Education Trust Fund
The Education Trust Fund is the largest operating fund of the State. Revenues credited to the Education Trust Fund are used for the support, maintenance, and development of public education in Alabama, debt service and capital improvements relating to educational facilities, and other functions related to educating the state’s citizens. Twelve tax sources are allocated to the ETF, the largest of which are the income tax, sales tax, utility tax, and use tax.
Public Road and Bridge Fund
The Public Road and Bridge Fund is the general operating fund for the Department of Transportation and receives all state revenues for that Department, all federal aid reimbursements, and all miscellaneous receipts.
Alabama Medicaid Fund
This is the major operating fund of the Alabama Medicaid Agency. Funding sources for this fund include tobacco settlement funds, intergovernmental transfers from other state agencies providing services to Medicaid eligible clients, public hospital transfers, nursing home and pharmacy provider taxes, and federal matching funds.
Mental Health Fund
This is the major operating fund of the Department of Mental Health. It is funded by the Special Mental Health Trust Fund, a special fund that is comprised of receipts from certain public utilities taxes, contractors’ gross receipts tax, distillers and whiskey tax profits, insurance premium taxes, as well as federal funds. This fund also receives annual appropriations from the State General Fund and the Education Trust Fund.
Public Welfare Trust Fund
This is the major operating fund of the Department of Human Resources. It is mainly funded by the whiskey tax and the Alabama Alcoholic Beverage Control board profits, sales tax, ad valorem tax, beer tax, as well as federal funds. This fund also receives annual appropriations from the State General Fund and the Education Trust Fund.