Official Ballot Language
The constitutional amendment clarifying references to the Permanent School Fund, allowing the General Land Office to distribute revenue from Permanent School Fund land or other properties to the available school fund to provide additional funding for public education, and providing for an increase in the market value of the Permanent School Fund for the purpose of allowing increased distributions from the available school fund.
The Permanent School Fund (PSF) was established in the Texas Constitution of 1876, which set aside half of Texas' remaining public lands to help finance public schools. Several different terms are used in the Constitution to refer to this fund, and Proposition 6 would replace other terms with the single term, "Permanent School Fund" in all references.
The proposed amendment also provides for potential increases in distributions from the PSF to the Available School Fund (ASF), which provides funding to school districts on a per-student basis and supports classroom instructional materials and technology.
Currently, the General Land Office (GLO) is responsible for managing the public school lands; proceeds from the land and mineral rights are held in the PSF. The State Board of Education (SBOE) manages the investment of the PSF and, if the fund's investment performance permits, makes distributions from the PSF to the ASF. Only interest or revenue income from the PSF can be spent; the principal amount remains intact and will continue to benefit the public schools of Texas.
The proposed amendment would permit the distribution of some revenue derived from the public school lands directly to the ASF. The GLO, or an entity other than the SBOE with the responsibility for the management of permanent school fund land or other properties, would be permitted to transfer up to $300 million per year of revenues derived from the public lands that year. This provision addresses problems found by the Attorney General in a previous statute allowing such distributions.
The proposed amendment would also change the way the market value of the PSF is calculated by including additional assets that are currently not included (i.e., discretionary real estate investments and cash in the state treasury derived from PSF property). At the beginning of each legislative session, the SBOE determines the rate (up to a maximum rate specified in the Constitution) of the market value of the PSF that will go to the ASF. Given the current value of the PSF and the rate determined by the SBOE at the beginning of the last legislative session, this proposed amendment might provide approximately $75 million more to the ASF in both FY 2011-12 and 2012-13.
Increased distributions to the Available School Fund would provide support for public schools at a time when additional state funding for schools is needed.
Instead of transferring additional revenue to schools now, the revenue should be used to grow the Permanent School Fund to provide support for public schools in future years.