Nation’s largest K-12 endowment growing still
(Texas) A century-old public endowment for schools grew by more than $4 billion last year, reaching a record value of $41.5 billion.
The Texas Permanent School Fund, established by the Legislature in 1854, is expected to provide schools about $2.5 billion over the next two years.
“The Permanent School Fund is the gift that keeps on giving to Texas schools,” said Donna Bahorich, chair of the Texas State Board of Education in a statement. “With the board’s careful oversight and continued strong day-to-day administration, the fund will continue to support Texas schools for generations to come.”
The fund retains its position as the largest educational endowment in the country, which it has held since 2014, according to the Texas Education Agency.
While welcome news, the increase in distribution to Texas schools represents only a fraction of the money school officials say they need to provide all K-12 students a quality education.
In June, a fractured Legislature came to a last minute agreement on a $217 billion spending plan for the state overall that provided schools with $38.1 billion.
Under the plan, school funding is set to increase by about $275 million over the two years the budget will be in place, and most of that money will come from local property taxes as the state further reduced its share of costs.
School officials had been pushing a plan that would have added $2 billion in state funding to the education budget but that proposal lost out during final negotiations.
The Permanent School Fund began with a $2 million appropriation by lawmakers nine years after Texas became officially part of the United States. The money was a portion of a $10 million settlement state officials made with the federal government in exchange for surrendering their claims to land in what would become New Mexico, Colorado and Oklahoma.
Since then, the fund has had a colorful and important role in Texas history.
According to historian Lewis B. Cooper, almost as soon as the money had been set aside, lawmakers began looking for ways to use it for other purposes—first for railroad subsidies and later for state prisons.
The largest raid on the fund came during the Civil War, said Cooper, when, as a part of the Confederate south, Texas used some of the money to buy arms on the international market.
After the war, when Democrats took over during reconstruction, the Legislature rewrote the state constitution so that more binding rules protected the fund, including the restriction that disbursements would be limited to earned interest only.
In more recent years, the fund has benefited from school-land sales and leases of off-shore oil properties.
In addition to direct support to schools, the fund also serves as a financial guarantee for school bonds. Since a change to the state constitution in 1983, the fund has backed more than $166 billion in school borrowing and saving districts millions in lower interest rates.