Legislative Action

Minnesota Permanent School Fund Constitutional Amendment

This November, Minnesota voters will consider a constitutional amendment related to the Minnesota Permanent School Fund (PSF). As part of our commitment to keeping stakeholders informed on issues affecting public education, we want to provide an overview of the proposed amendment.

The Permanent School Fund was established when Minnesota became a state in 1858 and is one of the oldest sources of funding for public education in the state. Today, the fund has grown to more than $2.3 billion through revenue generated from school trust lands and investment earnings and provides annual distributions to every public school district, charter school, and tribal school in Minnesota.

The proposed constitutional amendment would modernize the formula used to distribute earnings from this existing trust fund. The recommendation originated from a nonpartisan legislative task force and later received strong bipartisan support in both the Minnesota House and Senate before being placed on the November ballot.

If approved by voters, the amendment would:

• Modernize the distribution formula used for the Permanent School Fund.
• Increase annual support for Minnesota public schools while preserving the long-term strength of the fund.
• Increase per pupil annual funding to STMA Schools beginning July 1, 2027. This equates to an estimated additional $170,000 to $295,000 per year.
• Not increase in property taxes, income taxes, sales taxes, or any other taxes.

The official ballot question reads:

"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?"

One important point to note is that constitutional amendments require approval by a majority of all voters casting ballots in the election. If a voter participates in the election but leaves the amendment question blank, the blank response is counted as a "No" vote.

This memorandum is intended solely to provide factual information regarding the proposed constitutional amendment. As always, we encourage stakeholders to become informed about the issues on the ballot and to participate in the election process. Additional information is available at www.mnPSFamendment.org.

Top 10 Facts About the Permanent School Fund Constitutional Amendment

1. The Permanent School Fund has existed since 1858. It was established when Minnesota became a state to provide long-term financial support for public education.
2. The fund already benefits public schools. Every public school district, charter school, and tribal school currently receives funding through the Permanent School Fund.
3. The fund has grown significantly. It has increased from approximately $675 million in 2010 to more than $2.3 billion today, but distributions have not kept pace because of the current constitutional formula.
4. The amendment modernizes the distribution formula—it does not raise taxes. Under the current constitutional formula, annual distributions are limited to 2.0% to 2.5% of interest and dividend earnings, resulting in an average distribution of approximately $68 per pupil in 2025. The proposed amendment would modernize the formula by using a 4.5% annual distribution based on the fund's market value, increasing the estimated average distribution to approximately $91 per pupil, while not increasing property taxes, income taxes, sales taxes, or any other taxes. 
5. The purpose of the fund remains unchanged. The Permanent School Fund will continue to exist solely to support Minnesota's public school students.
6. Every district benefits. If approved, every public school district, charter school, and tribal school would continue to receive funding through the Permanent School Fund.
7. The proposal received broad bipartisan support. It was unanimously recommended by a nonpartisan legislative task force and later approved with strong bipartisan support in both the Minnesota House and Senate.
8. Voter approval is required. Because the distribution formula is established in the Minnesota Constitution, changes must be approved by Minnesota voters.
9. A blank vote counts as a "No" vote. If a voter leaves the constitutional amendment question blank while voting in the election, it is counted as a "No" vote under Minnesota law.
10. The goal is to support both current and future students. The amendment is intended to increase support for today's students while preserving the Permanent School Fund as a sustainable, long-term resource for future generations. 

[Source: MN School Board Association (MSBA) https://www.mnpsfamendment.org/ Retrieved 7-28-2026]

When it comes to legislative advocacy, your voice matters! When advocating with legislators, it is important to have a basic knowledge of how public schools are funded in Minnesota. 

School Funding 101

Article XIII of the MN Constitution clearly states, "It is the duty of the legislature to establish a general and uniform system of public schools." 

State funding is very important to STMA students, staff, and stakeholders as approximately 84% of the district’s revenue comes directly from the state’s funding formula. 

Education spending is about 40% of the state’s budget but that money is not spread out evenly across Minnesota school districts. State legislators decide how much money will be spent. That money is allocated according to a complicated funding formula that gives different amounts of money to each school district.

Basic Formula and Categorical Aid: 

Every school district receives a basic amount of money in per-pupil spending. For FY2026, that amount is $7,481 per pupil. Minnesota school districts receive 19% less per student than they did in 2005, which equates to $1,420 less per student. 

The rest of the state money is distributed according to a complicated formula known as categorical aid. STMA does not qualify for much categorical aid. Categorical aid is somewhat arbitrary and the exact reasons why some school districts qualify and other school districts do not, is determined by state legislators. In short, this means STMA receives thousands of dollars less than other school districts. Click here to see STMA's categorical aid.

Why School Funding Matters to You and YOUR Child

STMA is a member of the Lake Conference. While we are similar to districts in the Lake Conference in academics, arts, activities, and athletics, in funding we are very different. 

This graph shows the amount each STMA student receives from the state compared to the amount other districts receive. In this example, the Hopkins School District receives $7,042 more per pupil than STMA. That’s a difference of over $47 million per year! 

STMA ranks 324/328--- almost dead last--- in general education per-pupil revenue among Minnesota public school districts. To learn more, click here. 

Special Education Cross-Subsidy:

The State of MN does not fully fund special education despite a plethora of mandates that districts must follow. For example, in FY2024 STMA diverted $4 million or $550.61 per pupil of funding meant for regular education classroom instruction to cover mandated but unreimbursed special education programming. The $4 million that STMA must divert from its general fund to pay for special education mandates substantially limits opportunities for all STMA students.

STMA has worked hard to increase student achievement and offer exceptional educational opportunities to help all students develop their full potential and build character. In order for us to maintain this investment in our students, we need to find a way of funding public schools that creates greater equity for all students, regardless of their zip code. ALL students deserve support and opportunities for students should not be determined by where their parents choose to live.

“We in America do not have a government by the majority. We have a government by the majority who participate.”  ~Thomas Jefferson

YOUR voice MATTERS! Please take the time to have your voice heard regarding these very important issues. Thanks, in advance, for your advocacy and support of STMA Schools!

According to the Congressional Management Foundation, if a legislator has not already arrived at a firm decision on an issue, YOU can influence his/her decision by using advocacy strategies. See below for advocacy strategies and the percentage of influence.

• In-Person Visit---94%
• Email with Personalized Message Describing Impact---92%
• Letter with Personalized Message Describing Impact---88%
• Phone Call---84%
• Form Email---56%
• Form Letter---50%