At a meeting of the State Board of Education’s Permanent School Fund Committee, staff presented a preliminary per‑capita apportionment rate for the 2025–26 school year and the committee recommended that the full board proceed with a previously approved transfer of approximately $1,810,000,000 from the Permanent School Fund (PSF) to the Available School Fund (ASF).

Sarah Khan, director of state funding, forecasting and fiscal analysis at the Texas Education Agency, told the committee the figure presented is a preliminary per‑capita apportionment rate for the 2025–26 school year and noted that a final rate will be established later in the school year by the commissioner of education. "This is the preliminary rate," Khan said, and she described the apportionment as the portion of state aid paid from the Available School Fund versus the Foundation School Fund and that the calculation uses estimates of funds available for expenditure divided by the prior year’s average daily attendance.

The committee then discussed the constitutional tests that govern transfers from the Permanent School Fund to the Available School Fund. Jared Stout, a representative to the committee on PSF matters, cited the constitutional requirement, saying in part that "the total amount distributed from the permanent school fund to the available school fund over a 10 year period consisting of the current fiscal year and the 9 preceding state fiscal years may not exceed the total return on all investment assets of the permanent school fund over that same 10 year period." Stout and staff showed the committee a 16‑quarter average calculation and a 10‑year rolling test intended to ensure the transfer does not violate Texas Constitution Article 7, Section 5(a).

Staff analysis reported a multi‑billion dollar buffer on the 10‑year test. Stout described the numeric result shown to the committee, saying the analysis found more gains than payouts in the 10‑year window and noted a buffer of about $18,000,000,000, while cautioning it remains possible to violate the test in a severe market downturn. He said staff estimated a roughly 30% investment loss would be needed to trip the 10‑year test and that the modeled probability of such a loss was "less than one half of 1 percent." Stout also noted the PSF Corporation and staff coordinate stress testing that also informs credit‑rating agencies and that the fund had received AAA affirmations from Moody’s, S&P and Fitch.

After discussion, a committee member moved that the committee recommend the State Board of Education complete the previously approved transfer of approximately $1,810,000,000 from the PSF to the ASF in fiscal year 2026, citing the staff analysis and Texas Constitution Article 7, Section 5(a). Mr. Kinsey seconded the motion. The chair asked for objections; none were raised and the chair announced, "Motion carries."

The committee’s action is a recommendation to the full State Board of Education; staff told the committee the per‑capita apportionment rate shown in the packet is preliminary and that the commissioner will set a final rate later in the school year (staff said a final rate will be presented in June 2026). The presentation referenced the General Appropriations Act as the basis for estimating funds available for expenditure.

The discussion included procedural history: staff said the committee and related bodies had reviewed distributions previously (the committee heard a related presentation last November), and staff described the 2010 scenario when the 10‑year test was previously tripped and the corporation followed a process to resolve that occurrence. The committee did not adopt changes to the methodology at the meeting; it recommended that the full board proceed with the transfer based on staff analysis.