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State Representative Paul Anderson
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4317
For more information contact: House GOP Communications 651-296-5520
GUEST COLUMN
Bonding bill trimmed, then approved
By State Rep. Paul Anderson
After a long and sometimes politically charged path, the bonding bill was finally signed into law March 15 by Gov. Pawlenty. He cut some $300 million out of the bill to get it down to $686 million. Among the more noteworthy of the vetoed projects were all funds for transit, some $46 million, and another $25 million for RIM projects around the state.
Unfortunately, another casualty of the process was $5 million in funding for the expansion at the Pope-Douglas Solid Waste facility in Alexandria. That project was removed from the bill by the second conference committee. The governor left open the possibility of another, smaller bonding bill, one that would presumably include Pope-Douglas. Because of the magnitude of the line-item vetoes, the Democrats may bring up another bill that would address some of the projects left out. I am hoping that’s what will happen later in the session.
An information-only hearing held recently in the Education Finance Committee shed light on a little-known state program designed to help school districts with their funding needs. The Permanent School Fund of Minnesota consists of the proceeds of the land granted to the state by the federal government when we became a state. Although much of the original land granted to the state has been sold off, the state DNR is responsible for managing about 2.5 million acres of school trust land. The net proceeds from management activities on this land (timber sales, mining, lease revenue, etc.) are added to the principal of the fund.
The state holds the land and accumulated revenues from the land in trust for the benefit of public schools in Minnesota. The State Board of Investment is responsible for investing the principal of the fund. The interest and dividends arising from the fund are distributed to the state’s school districts.
According to figures for last year, the fund balance was over $612 million. After all expenses and administration had been taken out, $27.4 million was available for education. That’s a return of 4.5 percent. For this year, the net transfer to education was $22.8 million, which works out to a payment to school districts of about $28 per student.
Looking further at the numbers, it causes one to wonder about the cost of administration. The gross receipts from timber sales in 2007 were nearly $10 million. However, only $2.74 million was actually transferred out for education purposes, which represents 28 percent of total sales. The percentage of lease revenue actually used for education was higher at 78 percent, while land sales were 100 percent. In total, with all three categories combined, gross sales for the year totaled nearly $30 million. The net amount transferred for education was just over $18.5 million or 62 percent.
The state of Utah has a similar program, except they have changed its administration from its state DNR-type organization to a more privately run method of operation. In 10 years, the assets of their trust fund have grown from $18 million to over $1 billion. Kevin Carter, director of Utah’s School and Institutional Trust Lands, testified before the committee and told us that they have turned the direction of the trust lands to one of managing them for the benefit of school kids. “We’ve changed the focus,” he said, “and operate more like a private company.”
What they are doing in Utah is a lesson to other states that still have school trust lands. The first priority should be to manage them for the best results for students. Here in Minnesota, only 62 cents of every dollar earned by the School Trust Fund actually goes to education. That needs to change.
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Rep. Anderson encourages constituents to contact his office with input regarding any state legislative issue. He can be reached on the web at www.house.mn/13A and via email at rep.paul.anderson@house.mn. To contact Anderson by phone, call (651) 296-4317. Mail can be sent to Rep. Paul Anderson, 239 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, Minnesota 55155.
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