School Trust Land
What is school trust land, and how much does Minnesota have?
Our forests and our children are both renewable resources, and growing one helps the other grow as well. How? By harvesting forests on designated School Trust Land in Minnesota, money is generated and used to benefit Pre-K-12 public education.
This isn't a new way to help fund education, though. The U.S. Congress granted School Trust Land at the time each state joined the Union, beginning with Ohio in 1803. Minnesota entered the Union in 1858. In return for the granted land, states agreed to use the proceeds from initial land sale to establish Permanent School Funds (PSFs), the principal of which would forever remain intact. But income earned from the funds' principal would be used to support public schools. And that continues today.
Minnesota has nearly 2.5 million acres of School Trust Land, in the locations indicated by the green dots. While most of the School Trust Land is lcoated in the northern Minnesota counties of Aitkin, Beltrami, Cass, Cook, Hubbad, Koochiching, Itasca, Lake, Roseau and St. Louis, the map's yellow shading shows that nearly all Minnesota counties have some School Trust Land. The state also has an additional 1 million acres of school trust mineral rights. Revenue derived from these lands and minerals is deposited into the state's Permanent School Fund.
How Do Individual Schools Benefit?
Every public school district in Minnesota - and there are 340 of them - receives funding from the Permanent School Fund based on student enrollment and current size of the fund. In Fiscal Year 2012, $24.3 million was distributed to school districts - or $29.47 per K-12 student. So the Anoka-Hennepin School District, for example, received $1,176,734 from the Permanent School Fund; the Brainerd School District, $194,560; and so on.
Who Manages School Trust Land?
Management of these lands is entrusted to the Department of Natural Resources, which balances maximizing long-term economic return for School Trust Land with having that land sustainably managed to serve the public benefit by providing recreational opportunities, wildlife habitat and other uses consistent with natural resource management principals.
60% of permanent School Trust Land is classified as commercial forest currently available for timber harvest, with subsequent timber sales helping further add to the Permanent School Fund.
New Law Means Schools Benefit Further From School Trust Lands
The Department of Natural Resources, which does an excellent job of managing many aspects of our great outdoors, is the trustee for School Trust Lands. But it treats those lands differently than normal DNR lands.
The difference is that while the management priority for DNR lands includes many considerations, the priority for School Trust Lands is to maximize their long term economic return for the benefit of Minnesota's schools.
In 2012, the Minnesota State Legislature passed a law mandating that if there is ever a conflict in these goals, long term economic gain on School Trust Lands will take precedence. And that's good news for Minnesota's schools and children.
How Does The Permanent School Fund Work?
The Permanent School Fund is managed by the State Board of Investment (SBI). Income earned from the School Trust Lands - derived from land and timber sales, land leases, mineral royalties, state forest campground fees and other means collected since the time of statehood - is added to the PSF principal, which is then invested by the SBI.
In accordance with the Minnesota Constitution, the principal of the PSF cannot be spent. But each year the SBI distributes interest and dividends earned from investment of the PSF to the public schools. This direst path of funding is an improvement over past practices. Recent actions by the Minnesota State Legislature ensure money received through the School Trust Fund goes directly to school districts across the state, instead of replacing portions of the state's General Fund.
How Much Money is Raised from School Trust Land?
At the end of Fiscal Year 2011 (the most recent year for which information is available), the market value of the Permanent School Fund was $785.2 million - an increase of $111.3 million over the previous year.