Focus Report, Volume 86, Number 3, August 2019 Page: 17
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* Proposition 7: Allowing increased
distributions to Available School Fund
HJR 151 by Huberty (Taylor)Background
Established under Texas Constitution Art. 7, sec. 5,
the Permanent School Fund (PSF) is an endowment trust
that holds the fund's investment returns and the proceeds
from state land and mineral rights dedicated to the
support of public schools. The State Board of Education
and the School Land Board, an independent entity of the
General Land Office, share management and investment
responsibilities for the PSF and make distributions from
the PSF to the Available School Fund (ASF). The ASF
pays for instructional materials and classroom technology
and provides additional funding to school districts on a
per-student basis.
The State Board of Education manages the PSF's
securities portfolio, and the School Land Board manages
the fund's real assets investment portfolio. The School
Land Board also oversees the management, sale, and
leasing of more than 13 million acres of PSF land. The
PSF was valued at $44 billion at the end of fiscal 2018.
Sec. 5(g) permits the General Land Office or an
entity other than the State Board of Education that has
responsibility for the management of PSF land or other
properties to distribute to the ASF up to $300 million
each year in revenue derived during that year from the
land or properties.
Digest
Proposition 7 would amend Texas Constitution
Art. 7, sec. 5(g) to allow the State Board of Education,
the General Land Office, or another entity that had
responsibility for the management of revenues derived
from Permanent School Fund land or other properties to
distribute each year to the Available School Fund revenue
derived during that year from the land or properties, up to
$600 million by each entity each year.The ballot proposal reads: "The constitutional
amendment allowing increased distributions to the
available school fund."
Supporters say
Proposition 7 would improve funding for public
schools by doubling the constitutionally authorized
annual distribution from the School Land Board to the
Available School-Fund. Recent investment returns realized
by the land board would have allowed greater annual
distributions were it not for the $300 million cap on
distributions in the Texas Constitution. The land board
would retain discretion to distribute revenue levels below
the cap should investment returns be lower in a given year.
The proposition would provide flexibility for the General
Land Office and the State Board of Education to send
additional funding derived from the Permanent School
Fund to the Available School Fund.
As the Permanent School Fund's assets grow and
improve in performance, the Legislature should take
advantage of the opportunity to make more revenue
available through the Available School Fund for public
education. The use of the Available School Fund is an
appropriate way to increase funding for public education
without having to raise taxes.
Critics say
Proposition 7 would double the amount of revenue
that the School Land Board could directly contribute to
the Available School Fund without any assurances that the
additional spending would improve education outcomes.
Texas should be fiscally prudent by resisting continued
growth in state spending.House Research Organization
Page 17
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Texas. Legislature. House of Representatives. Research Organization. Focus Report, Volume 86, Number 3, August 2019, periodical, August 27, 2019; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1364417/m1/17/?q=%22~1~1%22~1: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.