Senate backs creating an education reserve from school fund, advancing SB98

Senate Bill 98, proposing a reserve drawn from the Uniform School Fund to create an Education Budget Reserve Account, passed on Jan. 25 to the third‑reading calendar after floor debate.

Sponsor Senator Hilliard described the measure as a way to build a dedicated savings account for public education, modeled on the existing general‑fund rainy day fund. He said the special reserve would take up to 10% of year‑end surpluses in the Uniform School Fund into a non‑lapsing account for education only. “Currently, that fund is $94,000,000 on our budget,” Hilliard said, arguing that a modest, statutory reserve provides protection against future shortfalls.

Opponents worried the move sends the wrong message to educators and could reduce money for urgent education supplementals. Senator Hall said that during earlier periods of shortfall, education lost ongoing funding and warned that putting surplus money into a reserve could signal withholding funds from immediate needs. Senator Stevenson, as chair of the Appropriations Subcommittee for Education, said removing 10% of supplementals when schools have needs would be risky and asked senators to consider which programs they would cut.

Supporters framed the bill as prudent fiscal policy: setting aside a small portion of one‑time surpluses avoids later painful cuts and reduces the need to raise taxes in downturns. The Senate recorded 15 ayes, 11 nays and 3 absent; SB98 advances to third reading for further consideration and potential amendment.

Next steps: SB98 will appear on the third‑reading calendar and may be amended or passed to the House depending on further action.