FUNDAMENTALS

What is the Permanent School Fund?

The Permanent School Fund (PSF) is a constitutionally established trust created when Minnesota became a state in 1858. Public lands were set aside specifically to generate revenue for public education, creating a permanent source of support for Minnesota students.

 

Why was the Permanent School Fund created?

The fund was created to provide a permanent, self-sustaining source of financial support for Minnesota's public schools that would benefit generations of students.

 

Where does the money come from?

Revenue comes from:

• Timber sales

• Mining activities

• Land leases

• Other natural resource uses

• Investment earnings generated by the fund

These revenues are deposited into and invested through the Permanent School Fund.

 

Who manages the Permanent School Fund?

The fund is managed through a partnership between:

• Minnesota Department of Natural Resources (trust lands)

• Minnesota State Board of Investment (financial investments)

• Minnesota Department of Education (distribution to districts)

 

How large is the fund today?

The fund has grown from approximately $675 million in 2010 to more than $2.3 billion in 2025.

 

Is this a new fund?

No. The Permanent School Fund has existed since statehood and currently provides annual distributions to public schools.

 

Do all districts currently receive Permanent School Fund revenue?

Yes. Every public school district, charter school, and tribal school currently receives distributions from the fund.

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What is the constitutional amendment proposing?

The amendment would modernize how annual distributions are calculated by allowing distributions based on total market value rather than limiting distributions primarily to interest and dividends.

Because the current distribution formula is written into the Minnesota Constitution. Voter approval is required to change it.

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What exactly would change?

The amendment would:

• Replace the current interest-and-dividend-only approach

• Allow a distribution equal to 4.5% of the fund's three-year rolling average value

• Move detailed distribution mechanics into state statute

 

What would stay the same?

The fund would remain:

• Dedicated to public schools

• Managed by the State Board of Investment

• Protected as a permanent trust

• Distributed to districts statewide

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THE PROPOSED CONSTITUTIONAL AMENDMENT

Does this change the purpose of the fund?

No. The purpose remains exactly the same: supporting Minnesota public schools.

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Who recommended this change?

A nonpartisan legislative task force established by the Minnesota Legislature after more than a year of research and analysis.

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Was the recommendation unanimous?

Yes. All nine members of the Task Force unanimously endorsed the recommendations.

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IMPACT ON SCHOOLS AND STUDENTS

Why is this important for school districts?

The amendment would increase distributions to schools while preserving the fund for future generations.

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How much more funding could schools receive?

Task Force analysis estimated approximately a 40% increase in annual distributions compared with current levels.

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Will every district benefit?

Yes. Every public school district, charter school, and tribal school receives funding on a per-pupil basis.

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How can districts use the funds?

Funds continue to be used for the benefit of students and local school district priorities. The amendment does not create new spending restrictions.

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Will districts need to apply for the funding?

No. Distribution would occur through existing state processes. This simply increases the amount distributed.

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Could this reduce future education funding?

This proposal changes only the distribution formula for the Permanent School Fund.

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TAXES AND FINANCIAL IMPACT

Is this a tax increase?

No. The amendment does not increase property taxes, income taxes, sales taxes, or any other tax.

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Will local property taxes increase?

No. The amendment does not authorize or require local property tax increases.

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Does this create a new government program?

No. The Permanent School Fund already exists.

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Does this require additional state spending?

No. The proposal changes how money from an existing trust fund is distributed.

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Could the fund run out of money?

The proposal was specifically designed to preserve the fund as a perpetual resource while supporting current students.

 

Why was 4.5% selected?

The Task Force determined 4.5% best balanced:

• Current student needs

• Long-term fund preservation

• Distribution stability

• Inflation protection​​

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Why not distribute 5% or more?

The Task Force concluded 4.5% better protected long-term purchasing power while still significantly increasing distributions.

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What happens if the stock market declines?

The three-year rolling average helps smooth market fluctuations and reduce volatility in annual distributions.

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ELECTION AND VOTING QUESTIONS

What will voters see on the ballot?

“Shall the Minnesota Constitution be amended to increase the funding going to all school districts from the permanent school fund, which is a fund that supports school districts without raising individual income or property taxes, effective July 1, 2027?”

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When is the election?

November 3, 2026.

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When does early voting begin?

September 18, 2026.

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What happens if voters approve the amendment?

The new distribution method would take effect July 1, 2027.

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What happens if voters reject the amendment?

The current constitutional language and distribution formula remain in place.

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Does leaving the question blank matter?

Yes. Under Minnesota constitutional amendment rules, a blank vote effectively counts the same as a vote against passage.

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Does this amendment need a simple majority?

No. It must receive a majority of all voters participating in the election.

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COMMON MISCONCEPTIONS

Isn't this just another school tax increase?

No. The amendment does not raise taxes.

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Isn't this taking money away from future students?

No. The proposal was specifically designed to balance the needs of current and future students.

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Isn't this a political issue?

The recommendation came from a bipartisan legislative process and a unanimous task force recommendation.

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Isn't this only for certain districts?

No. Every public school district, charter school, and tribal school benefit.

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Isn't this changing the Permanent School Fund itself?

No. The fund remains intact. The proposal changes how annual distributions are calculated.