DALLAS - Texas will use most of the nearly $2 billion of stabilization funds it expects to get soon for schools under the federal stimulus plan to pay for education-related expenses that normally would be footed by the state's Permanent School Fund.

The Legislature appropriated $1.38 billion of the stabilization funds in the 2010-11 budget to pay for expenses, such as textbooks, that normally are funded through the PSF. Due to investment losses, the PSF - which also provides a triple-A rated wrap for school bond issues - doesn't have the resources to pay for those expenses, according to Lisa Dawn-Fisher, director of school finance for the Texas Education Agency.

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