Legislative analysts say Public Education Stabilization Fund holds roughly $250.9 million, below 15% cap

Jared Tedrow, deputy division manager in the Legislative Services Office's Budget Policy Analysis Division, told the Joint Finance-Appropriations Committee that the Public Education Stabilization Fund (PSIF) acts as a safety net for the state’s public school support program appropriations.

“Public Education Stabilization Fund or PSIF is, it acts as a safety net for the public school support program appropriations,” Tedrow said, describing the fund’s role when appropriations are higher or lower than projected.

Tedrow told the committee the PSIF historically used a cap of 8.334 percent of state funds appropriated to public schools; House Bill 521 raised that cap to 15 percent. Under the current calculation in the presentation, 15 percent of state funds for schools would be about $440,390,000. With the fund’s cash balance near $250.9 million, Tedrow said, roughly $189.6 million could be deposited before the reserve hit the 15 percent cap.

He reviewed the fund’s recent activity: withdrawals occurred between 2015 and 2021 during a period of rising support units and appropriations; the committee considered and made transfers in 2020–2023 that produced some deposits in later years; and fiscal year 2024 recorded no deposits or withdrawals after the committee placed language in the appropriation bill directing that FY2024 school appropriations be distributed to schools.

Tedrow also described how statutory changes have altered post-cap flows. When the PSIF previously reached its cap, excess dollars went to a bond levy fund; House Bill 521 removed bond levy as the backstop and established that excess would instead flow to the school district facilities fund created in House Bill 292.

On near-term prospects, Tedrow said the governor recommended a $50 million transfer into PSIF on July 1, 2026, and that, absent committee action, a rough estimate of an additional $35 million to $40 million could be deposited at the end of the year based on current appropriations and fewer unappropriated support units. He also said the fund generates roughly $8.9 million in interest per month.

Why it matters: PSIF is the mechanism the Legislature expects to rely on if school appropriations outpace available revenue; its size and statutory routing of any excess affect whether dollars are held in reserve for schools or shifted to district facilities funding.

Tedrow concluded his presentation with statutory references and a reminder that Idaho code requires JFAC to review the fund and consider transfers when a withdrawal has occurred. He then answered committee questions before the meeting moved on to budget-setting business.