Trust fund money distribution

The way money held by the state to benefit school districts is distributed could change under three bills heard in the House K-12 Finance Division Feb. 26 and 27.

According to the nonpartisan House Research Department, the Permanent School Trust Fund consists of the proceeds of all the lands granted at statehood by the federal government for the benefit of schools, proceeds from swamp lands granted to the state, and cash and investments credited to the fund.

The Department of Natural Resources manages about 2.5 million acres of school trust land. Proceeds from those activities, such as timber sales, minerals activities or lease revenue are added to the fund principal, which is invested by the State Board of Investment. As of June 30, 2007, the fund totaled $714 million.

Sponsored by Rep. Denise Dittrich (DFL-Champlin), HF2975 would eliminate subtraction of the fund endowment that is now offset against each district’s general education aid on a per pupil basis. It would net an extra $29 million for districts in Fiscal Year 2009.

A second bill she sponsors, HF2973, would allow a district to use this money for technology purposes beginning in Fiscal Year 2009.

Both were laid over Feb. 26 for possible inclusion in a possible division omnibus bill, as was HF3206, sponsored by Rep. Tom Rukavina (DFL-Virginia). His bill, laid over on Feb. 27, would establish an ongoing technology allowance of $60 per pupil.

Rukavina said the bill starts off at $60 per-pupil and required a formula based on property wealth in the districts.

Most of the money on these lands is generated from mineral and timber sales with a small amount generated by land sales, said Marty Vadis, director of the DNR lands and minerals division.

Rep. Marsha Swails (DFL-Woodbury) said the $28 million generated by the lands seems conservative and questioned the lack of emphasis on renewable resources.

Companions to the Dittrich bills, SF2392 and SF2422, each sponsored by Sen. Chuck Wiger (DFL-North St. Paul), await action by the Senate Finance Committee. Rukavina’s bill has no Senate companion.