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Legislative analysts report Public Education Stabilization Fund at $250.9 million, cap raised to 15% after 2021 change
Summary
Legislative Services Office staff briefed the Joint Finance-Appropriations Committee on the Public Education Stabilization Fund balance, the statutory cap increase passed in 2021, and the remaining capacity before the fund reaches its 15% limit.
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, known as PSIF, held about $250.9 million as of July 1, 2024.
“That fund acts as a safety net for the public school support program appropriations,” Tedrow said, adding that the cap on the fund was increased in 2021 from a prior level traditionally referred to as 8.334% to a new cap of 15% of state funds appropriated to public schools.
Tedrow said that with state funds for public schools just under $3.0 billion (about 2.94 billion in the presentation), the 15% cap would be roughly $440.4 million, leaving roughly $189.6 million of capacity before PSIF would hit the cap. He also noted the fund was earning interest and that no deposits or withdrawals occurred in fiscal year 2024 because appropriations were distributed directly to school districts under language the committee had placed in the appropriation bill.
The presentation traced PSIF activity over the last decade. Tedrow said withdrawals occurred from 2015 through 2021 during periods of growth in support units and appropriations, and that deposits occurred in later years as appropriations and legislative actions replenished the fund. He noted that prior to the 2021 law change, excess funds had flowed to a bond levy fund; under current law excess funds would flow into the school district facilities fund established by later legislation.
Tedrow told the committee the governor had recommended a $50 million transfer into the stabilization fund effective July 1, 2026, and that absent other action the committee’s calculations indicated an additional roughly $35–40 million could be deposited at year end based on current support-unit estimates.
The presentation cited statutory references the analyst listed in his materials for permissible sources and uses of the stabilization fund.
