Minnesota schools received nearly $24 million in 2005 from a revenue source that's as sustainable as a stand of trees—and older than Minnesota's statehood.
Revenue from state-owned lands set aside for the purpose of school funding—and managed by the DNR—are deposited into two funds, the Permanent School Fund and the Permanent University Fund. Income is generated from the sale of timber, sale of land, gravel leases, state forest campground fees, and hunting cabin leases, as well as mineral rights—including rents and royalties on taconite iron ore, peat leases, and nonferrous mineral leases.
In the state's fiscal year 2005, these activities contributed more than $16 million to the Permanent School Fund, bringing its principal to $612 million. The fund provided K-12 schools with about $19 million in payments from investment interest and dividends. Money from the Permanent School Fund is included in the general education aid that the state provides to all school districts. For the current school year, the fund provides about $23 in school funding for every student in a public school in Minnesota.
The Permanent University Fund paid out almost $1.2 million to all four University of Minnesota campuses—Twin Cities, Duluth, Morris, and Crookston—in 2005. Payments support academic endowments and mineral research, as well as the University of Minnesota's largest student scholarship program. About 20 percent of university freshmen, or 1,000 students, receive a scholarship from the fund. The scholarships, distributed by the Iron Range Scholarship program, are available to any Minnesota resident at any University of Minnesota campus. The scholarships range from $1,000 to $3,000 per year over two to four years.
The two funds have similar histories. The land base for the Permanent School Fund was started in 1849, when Minnesota became a territory and two sections of every township were set aside to support schools. More land was added after Minnesota became a state in 1858. But in 1862, Minnesota, like other states seeking cash for schools, began selling its trust fund lands. The state probably lost millions of dollars before the Legislature decreed in 1901 that mineral rights would be retained on all trust lands and that the state would selectively retain and manage the best of the remaining school trust lands. Today the DNR manages about 2.5 million acres of school trust lands, plus about 1 million acres of mineral rights on lands already sold.
The Permanent University Fund was founded when Congress granted 46,000 acres of land to support a state university in 1851 and an additional 46,000 acres in 1857. Most of those lands were sold to pay off debt from constructing the four state universities. As of February 2006, about 26,000 total acres remained under DNR management, with about 21,000 acres of additional mineral rights.
"The DNR is dedicated to ensuring these lands are managed for securing maximum long-term economic return while applying sound natural resource conservation principles," says Marty Vadis, DNR Lands and Minerals director. To learn more about school trust lands, go to www.dnr.state.mn.us/lands_minerals/pubs.html.
Maryanna Harstad
DNR Lands and Minerals planner
