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Lawmakers press officials on using PSIF interest and fund balances to plug budget shortfalls
Summary
DFM and LSO representatives told JFAC the governor recommended limited use of PSIF balances and a one‑time transfer of interest earnings to the general fund to reduce cuts; lawmakers expressed concern about repurposing education-dedicated interest and requested more detail on balances and statutory authority.
Committee members pressed the Department of Finance and Management and the Legislative Services Office about the governor's recommendation to use Public School Income Fund (PSIF) resources to reduce cuts in the FY2027 budget.
Laurie Wolf, administrator for the Division of Financial Management, said the governor's recommendation included four statutory exceptions and that moving interest earnings from PSIF to the general fund this year was a one‑time exception intended to minimize reductions to local school funding. "This year, we are requesting that those interest earnings... be transferred," she said, adding that the interest projection used in the FY2027 calculations was roughly 4%.
Representative Petske and others objected to repurposing interest earmarked for education and asked why the budget did not instead use the Budget Stabilization Fund or other alternatives. Wolf replied that the governor sought to protect public-education statutory increases by using PSIF and other high-interest accounts as a temporary balancing tool.
Committee members also asked for itemized fund-balance reports for districts and for detail on how many LEAs hold contingency or "fund balance" savings; the superintendent and analysts said they would provide those follow-ups.
What to watch: Lawmakers signaled they want clearer accounting of PSIF balances, interest projections and any statutory language authorizing transfers before approving related budget bills; the debate establishes a likely follow-up request for written reconciliation and legal authority.
Sources: Testimony from Laurie Wolf (DFM), Kellen McGurkin (LSO), and committee questioning.
