Thursday, December 03, 2009

Permanent School Fund Hearing. The Promoting School Trust Lands Subcommittee, chaired by Representative Denise Dittrich (DFL-Champlin), met this afternoon in the State Office Building. For those of you who need a refresher course, Representative Dittrich sponsored legislation during the 2008 session that changed the way that revenue generated by interest from the Permanent School Fund endowment is factored into the state's education funding system and how these lands are managed.

The public lands that comprise the generate the income for the endowment largely spring from a couple of sources, particularly the lands designated in each township for education purposes that date back to Minnesota's statehood. A number of these properties have already been sold, with the revenue going into the fund, but approximately 2.5 million acres still contribute to the fund. Most of the revenue now comes from leases and mineral exploration and mining rights.

The primary problem Representative Dittrich has sought to address in her original legislation and her subsequent involvement with the issue is how to generate greater revenue from this state-managed property. The Minnesota Department of Natural Resources currently manages these parcels and the general impression is that they are very conservative in the approach they use to promote these properties for revenue-raising purposes. Representative Dittrich's subcommittee has looked at how similar public properties are managed in other states and is trying to find a method by which greater revenue could be garnered through more aggressive promotion and investment. Utah is being studied as an example of how more aggressive management of state-owned property can generate considerably more revenue for school districts.

Given the condition of the state budget and the likelihood that we will see tight budgets for the next few years, any new revenue will be welcomed. Hopefully, Representative Dittrich's efforts will bear fruit. What she is asking the state's education community to do is become more aware of this issue and urge decision-makers to support a more aggressive approach to the promotion of these properties.

Charter School Issues Back in the News. Yesterday's StarTribune ran an interesting story on charter schools yesterday largely centered on the use of charter school lease aid to purchase bonds to construct buildings for charter schools. Loose regulation of these practices have resulted in the use of high-risk junk bonds and the questionable fees charged to charter schools by the companies helping them construct these buildings. Because charter schools cannot own property, they are in effect backed into these agreements because they have limited alternatives in seeking long-term facilities for their programs.

This and several other issues will be studied starting next week in hearings chaired by Senator Kathy Saltzman (DFL-Woodbury). The first hearing will be held on Monday, December 7, at 1:00 PM in Room 112 of the State Capitol.

Link to Charter School Story: http://

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