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Staff explain growth of Idaho’s budget stabilization and education reserve funds and statutory caps
Summary
Legislative analysts described proposed transfers to savings accounts, how statutory caps operate, and the state’s larger cash posture compared with 2009 recessionary reserves.
Legislative Services Office staff showed the Joint Finance-Appropriations Committee charts of the budget stabilization fund (BSF) and the Public Education Stabilization Fund (PESF) and explained how transfers and statutory caps affect those balances.
Keith Bybee explained the governor’s FY2026 recommendation includes a proposed $59 million transfer to the budget stabilization fund that — if enacted and if revenue projections hold — would bring the balance near $939 million and would be at or near the statutory cap the committee discussed. Bybee noted the legislature last year temporarily set aside the statutory cap to avoid automatic transfers back to the general fund and that this committee can again choose whether to keep funds in BSF or leave them in the general fund.
Why it matters: savings accounts affect how the state would respond to a revenue downturn. Bybee contrasted present balances with 2009, when cash and reserves were much smaller and agencies faced deep cuts over several years.
Details: Bybee and committee members discussed how the Public Education Stabilization Fund functions as an overdraft protection for school support units: when support units exceed the budgeted level, the PESF covers the difference automatically; when support units are below projections the fund receives deposits. With the governor’s projection the PESF balance would move toward $293.6 million, the presentation noted.
Questions and follow-up: Representative Furness and others asked where interest earnings on those large cash balances appear in state accounting; Bybee said the treasurer’s office would provide a later briefing and Christopher Lahoset (LSO) later provided materials on pooled investments and interest earned. Committee staff said they would supply follow-up documentation on cap calculations and the prior-year bookkeeping change that temporarily suspended auto‑transfer back to the general fund.
