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Legislative analysts review Public Education Stabilization Fund as balance approaches 15% cap
Summary
Legislative Services Office analysts told the Joint Finance-Appropriations Committee the Public Education Stabilization Fund (PSIF) has a $250.8 million balance and could absorb roughly $189.6 million more before reaching a 15% statutory cap; analysts outlined how recent law and past transfers change where excess funds would flow.
Members of the Joint Finance-Appropriations Committee heard a status update on the Public Education Stabilization Fund on Wednesday from Jared Tedrow, deputy division manager in the Legislative Services Office.
Tedrow told the panel the fund “acts as a safety net for the public school support program appropriations,” explaining that the fund receives deposits when appropriations are less than formula requirements and can be drawn on when appropriations fall short. He said the statutory cap on the fund was historically 8.334% but was increased to 15% by recent legislation, and he walked members through the fund’s 10-year cash activity and current balance.
The fund held $250,800,000 as of July 1, 2024, Tedrow said. Using a state-funds base he described during the presentation, 15% would equal $440,390,000, leaving a variance of about $189,600,000 before the fund would hit the statutory cap. Tedrow also said the governor had recommended a $50 million transfer into the fund on July 1, 2026, and that an additional rough estimate of $35 million to $40 million could be deposited at year-end given current appropriations and support-unit counts.
Tedrow reviewed the fund’s history, noting that between 2015 and 2021 withdrawals occurred during a period of growth in support units and appropriations; the committee considered transfers in subsequent years and in some years excess dollars went to the bond-levy fund. He said that after a sequence of legislative changes, including the action he cited as “House Bill 5 21,” excess funds now would flow to the school district facilities fund established in “house bill 2 92” once PSIF reaches its cap. He closed by pointing committee members to statutory references in his handout for allowable sources and uses.
No formal committee action was taken on the presentation itself; committee members moved on to other agenda items after questions and discussion.
