MN Permanent School Fund

Minnesota Voters to Consider Permanent School Fund Constitutional Amendment

Minnesota voters will have an opportunity this fall to vote on a proposed constitutional amendment that would change how revenue from the state’s Permanent School Fund is distributed to public schools.

General Election: November 3, 2026
Early voting begins September 18, 2026

For South St. Paul Public Schools (SSPPS), approval of the amendment could mean approximately $80,000 in additional annual revenue for the district.

The Permanent School Fund was established in Minnesota’s Constitution in 1858 to support public education. The fund is supported by revenue generated from state school trust lands, including timber sales, mining, leases and other natural resource activities. The fund’s assets are invested by the State Board of Investment, while the Minnesota Department of Education distributes available funding to school districts. The fund currently has more than $2.3+ billion in assets, up from approximately $675 million in 2010. However, the current constitutional formula primarily limits distributions to interest and dividend income, meaning the annual payments to schools have not grown at the same rate as the fund itself. Because the current distribution formula is written into the Minnesota Constitution, voter approval is required to change it.

What would the amendment change?

The amendment would update how annual distributions are calculated by allowing distributions based on total market value rather than limiting distributions primarily to interest and dividends. Specifically, it would establish a distribution of 4.5% of the fund’s three-year rolling average value. 

The three-year rolling average is intended to help smooth the effects of market fluctuations and provide more stability in annual distributions. A nonpartisan legislative task force studied the fund and recommended a 4.5% distribution approach intended to balance current distributions with preservation of the fund for future beneficiaries. Because the distribution would be based on the fund's market value rather than primarily on interest and dividends, there could be years when the distribution exceeds the fund's investment earnings. The three-year average is intended to reduce the impact of short-term market swings, but it cannot eliminate the effects of a prolonged downturn. 

The fund would remain dedicated to public schools, with the State Board of Investment continuing to manage its investments.

Why is a change being considered?

The Permanent School Fund has grown from approximately $675 million in 2010 to more than $2.3 billion in 2025. The documents explain that the current constitutional distribution formula has limited how much of that growth can be distributed to schools because it primarily relies on interest and dividend income.

A nonpartisan legislative task force was established in 2024 to examine the fund and recommend how to balance support for current students with maintaining the fund for future generations. The task force unanimously recommended the 4.5% distribution approach. Read the Task Force report here.

The Minnesota Legislature subsequently passed legislation to place the constitutional amendment before voters. The House passed the legislation 133-0, while the Senate passed it 43-24.

What could it mean for schools?

State projections estimate that the proposed change could increase annual distributions compared with the current formula, although actual distributions would depend on future fund performance. The Permanent School Fund materials estimate that annual distributions could increase by approximately 40%, although actual distributions would depend on future fund performance

For comparison, the fund distributed $68 per pupil in 2025. The materials estimate a potential distribution of $101 per pupil under the proposed model. If approved, the formula could result in larger distributions in some years, but the amount distributed would vary with the fund's value and investment performance.

Every public school district, charter school, and tribal school would receive funding on a per-pupil basis. Districts would continue to determine how the funds best support students and local priorities, and districts would not need to apply for the funding.

The amendment would not increase property taxes, income taxes, sales taxes or other taxes. It would change the distribution formula for an existing trust fund rather than create a new funding source or government program.