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State Board directs PSF Corporation to proceed with ~$1.81 billion transfer to Available School Fund
Summary
The State Board of Education voted to direct the Permanent School Fund Corporation to complete a transfer of approximately $1,810,000,000 to the Available School Fund for fiscal year 2026.
The State Board of Education voted to direct the Permanent School Fund (PSF) Corporation to complete a previously approved transfer of approximately $1,810,000,000 to the Available School Fund for fiscal year 2026.
On behalf of the Committee on School Finance and the Permanent School Fund, a member moved that the board "pursuant to the Texas Constitution Article 7, Section 5, and based on the analysis presented by the staff affirming the constitutional 10 year test was satisfied, I move that the State Board of Education direct the PSF Corporation to proceed to complete the previously approved transfer in the approximate amount of $1,810,000,000 from the PSF to the ASF in fiscal year 2026." The board discussed the constitutional two-test requirement (a percentage maximum and a 10‑year earnings test) and the board's historic application of an intergenerational-equity distribution rate (the board noted a guiding distribution rate of 3.45 percent in prior action).
Board member Maynard reported fund performance and context: the market value of the Permanent School Fund as of Aug. 31, 2025 was reported at about $59.8 billion, one-year performance near 8.1 percent, and multi-year excess returns that the PSF leadership said had produced material excess dollars available for distribution. The PSF chair described the transfer as within both the statutory and constitutional limits and consistent with preserving corpus for future generations.
The board voted to approve the direction to proceed with the transfer. Members discussed governance items (ethics policy and governance manual) and announced next PSF Corporation meeting dates and staffing updates.
Why it matters: the transfer funds the Available School Fund, which is part of the state funding stream for public education; distributions require application by the Legislature. The board's action directs the PSF Corporation to complete a transfer already authorized by prior board action and confirmed as satisfying constitutional tests.
Next steps: the PSF Corporation will complete the transfer in FY2026; the Legislature retains appropriation authority over how distributions are used in state school finance.
