DALLAS, Texas — Education Commissioner Michael Williams announced that the Texas Permanent School Fund (PSF) surpassed Harvard’s well-known and well-funded educational endowment in a Texas Education Agency (TEA) news release on September 30th. Yes, the Harvard University endowment at $36.4 billion was edged out by the PSF at $37.7 billion. Now, the PSF has now been named the nation’s largest educational endowment.
According to the TEA, the fund was started in 1854 with $2 million. Today, it is overseen by the Land Commissioner’s office and the State Board of Education (SBOE), which receives a percentage of the proceeds from the sale of state land and rental of mineral rights for oil and natural gas exploration. The state uses the fund to purchase instructional materials and pay for some school district costs.
Texas Land Commissioner Jerry Patterson credited a booming natural gas industry for growing the Permanent School Fund. In the TEA release, hesaid, “The Texas oil and gas boom isn’t just fueling the nation toward energy independence, it is earning hundreds of millions of dollars a year forpublic education.
Patterson added, “For the first time ever, Permanent School Fund lands and investments managed by the School Land Board resulted in deposits of more than $1.2 billion into the PSF during 2014.”
The TEA release also stated that a distribution from the Permanent School Fund is made every year to help purchase instructional materials and pay aportion of education costs in each school district. Since 1960, the PSF has distributed more than $23 billion to the schools.
During the 2014-15 biennium, the PSF will distribute about $1.7 billion to the schools and anticipates distributing more than $2 billion during the next biennium.
Breitbart Texas spoke to TEA Media Relations Director Debbie Ratliffe. She broke down the PSF information into more bite sized pieces, explaining how the public school dollars process works.
She said, “The (State Education) board sets aside a certain amount of the profits that will be used for schools each year. Even though the SBOE has earned the money, the Legislature through the formal budgeting process has to appropriate it back to us for use of the schools. The (state) constitution requires that the first draw on the money is to provide free textbooks for kids and, if any money is left over, to provide it directly to districts based on a per student amount. That typically amounts to around $275 to $300 per student per year.”
The TEA release also stated that “Along with providing direct support to Texas schools, the PSF provides a guarantee for bonds issued by local school districts and charter schools. The Permanent School Fund guarantee gives districts the equivalent of a AAA credit rating, the highest available. As a result, qualified districts are able to pay lower interest rates when issuing bonds, saving taxpayers billions of dollars. At the end of 2013, the PSF’s assets guaranteed $55.2 billion in school district bonds, providing a cost savings to 810 public school districts.”
This, in turn, helps guarantee school bonds as the Houston Chronicle reported, also noting that “Texas has no state income tax and funding for daily operations of public schools relies heavily on local property taxes and is handled separately and within Texas’ 2-year state budget.”
School funding has become a volatile issue on the Texas midterm election campaign trail. In 2013, District Court Judge John Dietz, a Democrat, preliminaryruled that the state’s public school funding mechanism was unconstitutional. This was predicated by a longstanding lawsuit filed by 600-plus school districts over “equity” in funding. Dietz reaffirmed his decision on August 28 which Breitbart Texas reported. The state will appeal the decision in the Texas Supreme Court.
At the September 19th gubernatorial debate, Democrat challenger Sen. Wendy Davis blamed GOP frontrunner Greg Abbott of coming in between students and school funding in his role as Texas Attorney General; however, Abbott countered and set the record straight by saying that the 2011 law Davis voted for actually removed the Attorney General’s ability to settle this kind of suit, Breitbart Texas reported.
Davis and fellow Lt. Governor Democratic candidate Sen. Leticia Van de Putte have expressed very liberal views in grabbing after school funding dollars, even offering up the state’s emergency reserves nicknamed the Texas Rainy Day Fund.
If the Dietz decision holds and the state is forced to redesign a new funding system, there’s no telling what other funds progressives will try to go after for their Big Education agenda.
Follow Merrill Hope, an original member of the Breitbart Texas team, on Twitter @OutOfTheBoxMom.