Lawmakers weigh using education stabilization fund to cover WPU increases as enrollment falls

The Public Education Appropriations Subcommittee on Tuesday reviewed the public education base budget and debated whether to tap the Public Education Economic Stabilization account to preserve ongoing WPU funding amid a projected student decline.

The subcommittee heard staff summary of Executive Appropriations Committee actions, including a 4.2% inflationary adjustment to the Weighted Pupil Unit valued at about $191,400,000 ongoing and a set of one-time allocations funded from stabilization dollars. Rochelle Gunderson, legislative fiscal analyst, told members that statewide enrollment declined from 657,275 students in 2025 and is projected to fall to about 643,073 in 2026, a 2.07% drop that reduces WPUs and creates roughly $28 million in savings in the basic program.

The context matters because the stabilization account was created to smooth funding in downturns by saving 15% of income tax revenue growth until the account reaches a cap (staff estimated the cap at roughly $528.4 million). Ben Leshman, finance manager, said the stabilization account currently holds about $440.6 million and that the fund has been used for a mix of hold-harmless payments, educator professional time and one-time capital and program investments. "It's really a way to try to smooth out the ups and downs within the education budget," Leshman said.

Senator Fillmore outlined a bill draft (listed as Senate Bill 119) that would add an additional trigger allowing the stabilization account to be used when federal tax policy reduces income tax receipts by an amount at least equal to the statutory inflationary and enrollment increase. "If federal tax policy causes income tax revenue to decrease by an amount that is at least as much as this inflationary and enrollment increase, we could use the stabilization fund to fund that increase in that year," he said. Fillmore told members the change would free up approximately $180—$190 million in what he described as ongoing state revenue while leaving roughly $300 million in the stabilization account for other priorities.

Committee members asked staff how the stabilization account has been used and whether the legislative branch has done strategic, long-term planning for converting one-time stabilization dollars into ongoing funding. Leshman said the committee has discussed broader structures previously, and that most uses to date have been one-time appropriations reflecting session priorities, though earlier proposals envisioned trust or pooled mechanisms that were not advanced. Representative McPherson raised the tension between using stabilization for growth-oriented projects (for example school construction) and the account's original role as a cushion against recessions.

Next steps: the senator said the bill language is in SB119 (lines cited in the meeting) and staff will pull the relevant lines for members to review. No formal committee action on SB119 or a reallocation of stabilization dollars occurred during the meeting.