Overview
- Voters approved a constitutional change that raises the Permanent School Fund payout rate from 2.5% to 4.5%, with the extra money slated to start flowing to districts on July 1, 2027.
- The State Board of Investment must calculate the distributable amount as 4.5% of the fund’s average net asset value over the prior three fiscal years and report that figure to the Legislative Permanent School Fund Commission and the education commissioner.
- Analysts and advocates estimate the move will raise per‑pupil distributions from roughly $68 to about $101, sending an estimated tens of millions more to districts statewide with larger districts like Anoka‑Hennepin gaining more than $1.3 million.
- Supporters say strong long‑term investment returns and task‑force modeling support the higher, smoothed payout as tax‑neutral relief for tight school budgets, while critics warn the larger withdrawals could reduce the fund’s value over time.
- The Permanent School Fund was created in 1858 from federal land grants and has grown to about $2.3–$2.4 billion through rents, royalties and investment returns, which supporters say makes a higher, permanent payout feasible.