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Legislative analysts report Public Education Stabilization Fund at $250.8 million; cap raised to 15% by recent law
Summary
Legislative Services Office presented a status update on the Public Education Stabilization Fund (PSIF), reporting a $250.8 million cash balance, monthly interest income, and a remaining $189.6 million gap to the 15% cap established by recently passed legislation; the governor has proposed a $50 million transfer in 2026.
Jared Tedrow, deputy division manager in the Legislative Services OfficeBudget Policy Analysis Division, told the Joint Finance-Appropriations Committee that the Public Education Stabilization Fund (PSIF) held $250,880,000 as of July 1, 2024, and is generating roughly $8.9 million a month in interest.
The fund acts as a safety net for the public school support program appropriations: when appropriations exceed available revenues the fund may be drawn down; when appropriations are underspent, deposits can be made to the fund, Tedrow said. He noted that a cap on the fund was increased last year to 15% of total state funds appropriated to public schools by the legislature.
Why it matters: the fund provides a backstop for school funding when appropriations fall short of needs. Tedrow said, based on the current base of state funds for schools (about $2.94 billion), 15% equals $440,390,000; with the current cash balance that leaves roughly $189,600,000 that could be added before hitting the cap. He also said the governor has recommended a $50 million transfer into PSIF on July 1, 2026.
Tedrow reviewed the funds history: initial legislative investments began in 2006, the balance fell during the late-2000s recession, and subsequent legislative actions restored the fund. Between 2015 and 2021 the fund saw withdrawals tied to growth in support units and appropriations; the committee considered transfers in 2020, 2022 and 2023. Because of language placed by this committee in the fiscal-year 2024 appropriation, Tedrow said there were no deposits or withdrawals in fiscal 2024 and the years appropriated dollars were distributed to public schools.
Tedrow also identified how excess deposits were handled historically: when PSIF previously reached its cap, excess dollars flowed to the bond levy fund; after legislative changes, excess would now be directed to the School District Facilities Fund created by statute.
Tedrow concluded his presentation with statutory references and an explanation of allowable sources and uses for the stabilization fund. He said the committee is required to review PSIF and consider transfers if withdrawals have occurred.
Ending: The presentation was informational; committee members did not take formal action on the stabilization fund during the session recorded in the transcript.
