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Idaho's stabilization funds approach record highs; lawmakers weigh statutory cap and use
Summary
Presenters told JFAC the budget stabilization fund and public education stabilization fund would rise under the governor's proposal, nearing or exceeding statutory caps, and discussed the state's improved fiscal cushion compared with 2009.
Legislative Services Office staff reviewed Idahos major savings accounts and their roles in weathering revenue downturns during the Joint Finance-Appropriations Committee meeting.
Mr. Bybee told members that the governors recommendation would increase the budget stabilization fund by about $59 million to roughly $939 million, which would be the largest balance on record and near a statutory cap tied to a percentage of general fund revenues. He noted the legislature last year temporarily suspended the statutory cap mechanics to avoid automatic transfers back to the general fund when balances exceeded the cap. "That additional $59,000,000 represents a 6.7 percent increase from fiscal year 2025," Bybee said.
The public education stabilization fund (PSIF) was also highlighted. Bybee explained PSIF functions as overdraft protection for public-school support: if support units end up higher than projected, the fund covers the difference at year-end; if units are lower, the fund can receive deposits. With the governor's numbers, PSIF would increase to about $293.6 million, near its statutory cap after adjustments made in recent legislation.
Bybee contrasted the state's current position with the 2009 recession. He noted that in 2009 total cash available to counter a downturn was about $641 million (about 21.7% of the original appropriation at that time) and was largely exhausted over three years; under the current projections, combined available balances exceed $1.6 billion, representing nearly 28.7% of the FY2026 original appropriation on the governor's figures. He said that combination of savings and the option to reduce spending left the state relatively well positioned should a recession occur in the near term.
Members asked practical questions about interest earnings on set-aside cash. Representative Furness and others wanted detail on where interest earnings appear in the reconciliation and how those earnings offset tax-anticipatory notes (TANs). Bybee deferred the technical cash-management details to the treasurer's office presentation later in the day, saying interest earnings and TAN costs typically offset each other in the reconciliation.
Ending: Members discussed whether to continue statutory exceptions to the cap and signaled the committee would consider the policy trade-offs while the working groups develop program-maintenance and transfer proposals.
