This November, Minnesota voters will have the opportunity to approve a constitutional amendment to increase funding to school districts statewide, all without raising taxes.
A proposal is on the table to bring the state’s Permanent School Fund up to date with modern financial practices.
Local districts could see tens of thousands in revenue if the amendment is approved, all without raising property, income or sales tax.
The Permanent School Fund (PSF) is worth $2.4 billion and draws its revenue from profits generated on school trust lands, including mineral royalties, land sales, leases and timber sales.
The PSF was established in 1858, the same year Minnesota achieved statehood. Schools receive sums from the fund twice yearly based on enrollment numbers.
Minerals mining operations account for 90% of this revenue. A single company’s royalty payments comprise the majority of these funds, placing the PSF’s portfolio at risk if production or market conditions change.
The fund’s value ballooned from $675 million in 2010 to the multi-billion-dollar asset it now represents. Education administrators believe the fund’s growth, coupled with its financial risk, calls for a new distribution model.
Voters will decide whether to allow annual distributions based on 4.5% of the PSF’s average market value over the previous three years.
Three-year averaging would reduce risks from market volatility and would allow schools to better anticipate The Minnesota Association of School Administrators (MASA) states this is a more modern distribution approach than the one Minnesota currently follows, which requires the state to distribute sums of money to districts based on the PSF’s interest and dividend earnings.
Had the new distribution formula been implemented in 2025, the Ely Public School District (ISD 696) would have seen $16,910.19 more than they actually received.
St. Louis County Public Schools, ISD 2142, would have received $61,281.99 more than they did in 2025.
The state estimates an average increase of $33 per student, per year to all school districts across Minnesota under the new approach.
If voters approve the amendment, Ely Public Schools superintendent Anne Oelke said ISD 696 would use the new funds for operating expenses, especially staff and programs.
ISD 2142 superintendent Brian Masterson said the additional money would flow into his district’s general education fund, which can be leveraged for any expense within ISD 2142’s budget.
State legislators put together a nonpartisan task force in 2024 to study the PSF and the disbursement process.
The task force recommended the distribution approach now on the table for voter approval, which additionally received unanimous approval in the Minnesota House of Representatives — a 134-0 vote.
The Range Association of Municipalities and Schools (RAMS) also unanimously passed a resolution in January to officially support the amendment.
RAMS cited the predominantly northern location of working school trust lands, the perpetual benefit of the PSF for public school students and the overwhelming contribution of mining dollars to the fund as reasons for their decision.
