Bipartisan bill aims to boost distribution of dollars from state's Permanent School Fund

Since 1862, Minnesota schools have benefited from funding distributed from the sale of land, timber and minerals on 2.5 million acres of land in the Permanent School Fund held by the Office of School Trust Lands.

State voters may have a say if Minnesota’s schoolchildren have access to more of that funding.

Sponsored by Rep. Spencer Igo (R-Wabana Township), HF3900, as amended, would put a proposed constitutional amendment on the ballot in November 2026 asking to increase the annual distribution from the fund to 4.5% of the three-year average net value of the fund beginning July 1, 2027.

The House passed the bill 133-0 Monday, sending it to the Senate.

The fund’s principal was $2.2 billion as of March 2025. During the 2024-2025 school year, the fund distributed a record $58 million.

Only dollars from dividends and interest from the previous year are now allowed to be dispersed, up to 2.5% of the fund’s total value. If the amendment passes, the fund would be able to distribute 4.5% of the total even if that amount includes part of the principal.

“The challenge that we are facing is that there is a large amount of money that is being well invested by the State Board of Investment, but it’s not being distributed. … This is really about putting that money to use,” House DFL Floor Leader Jamie Long (DFL-Mpls) said.

Rep. Sydney Jordan (DFL-Mpls) agreed, calling the amendment “a more modern way to manage our money.”

If passed by voters, the change would represent an additional $27.19 per pupil, or an increase of 28% to schools.

“This is an opportunity to strengthen education funding in Minnesota without raising taxes and without drawing from the state General Fund,” said Rep. Patricia Mueller (R-Austin), highlighting that these funds would arrive without being attached to a mandate.

While Rep. Ben Bakeberg (R-Jordan) said the unincumbered funds would keep teachers in classrooms, Rep. Roger Skraba (R-Ely) appreciates the statewide reach of the proposal.

“Whether you’re in Edina, in Ely, in Roseau, in Sleepy Eye, in Rochester, it doesn’t matter where you are, you are going to benefit.”