Following our publication of Wayzata School Board Director Dr. Milind Sohoni's perspective on the upcoming constitutional amendment, community discussion across the West Metro immediately sparked questions.

Residents are asking the practical questions that local debates often skip: Is this a hidden tax? Will it lower our local property tax referendums? Why are we changing an 1858 constitutional rule now?

To separate signal from noise heading into November, here is the objective operational breakdown of House File 3900 — sponsored by Rep. Spencer Igo (R-Wabana Township) — and what it actually means for Plymouth taxpayers and students.

1. The Payout Shift: Interest vs. Total Return

Under Minnesota's 1858 Constitution, the $2.3 billion Permanent School Fund operates under strict Victorian-era trust rules: only the interest and dividends can be spent, while the principal remains untouchable.

In modern endowment management, this model is considered outdated. It yields roughly 2% to 2.5% annually (~$58.6 million in FY2025).

The proposed amendment shifts Minnesota to the model used by university endowments and private foundations: distributing 4.5% of the fund's rolling three-year average market value.

The Immediate Upside: Based on recent fund valuations, distributions would jump from ~$58.6 million to ~$86.4 million — injecting an estimated $28 million in new recurring revenue into public schools statewide.

The Long-Term Safeguard: The three-year rolling average is designed to smooth out stock market dips so school budgets don't face sudden cliffs during economic downturns.

The Principal Question: The amendment also rewrites the fundamental promise of the fund. Current constitutional language requires that the fund's principal remain "perpetual and inviolate." The new language replaces that standard with a mandate to "preserve the purchasing power of the fund over time." In practical terms, this means annual distributions could include realized capital gains — not just interest and dividends. Proponents argue this is how modern endowments operate sustainably. Critics note it marks a philosophical shift from protecting nominal principal to protecting inflation-adjusted principal, which carries different long-term risks.

2. The Local Reality Check for the West Metro

Advocates rightly point out that this provides revenue without raising taxes. However, voters should understand the actual local scale.

The $28 million boost is distributed strictly on a uniform per-pupil basis across all Minnesota public and charter school students. Across roughly 850,000 public school students statewide, that equals an additional ~$33 per student per year.

For a large district like Wayzata Public Schools (~13,000 students), this represents roughly $400,000 to $450,000 in additional annual revenue.

While every recurring dollar helps fund classroom supplies, staffing, or technology, it is not a windfall that replaces local operating referendums. It is a supplemental buffer, not an alternative to local funding.

3. Why Did 24 State Senators Vote "No"?

The measure passed the Minnesota House unanimously (134-0), with equal bipartisan support. But the final conference committee agreement faced a sharper split in the Minnesota Senate, passing 43-24. All 34 Democrats and 9 Republicans voted in favor, while 24 Republicans opposed it.

(Editor's Note: A previous version of this article incorrectly stated the Senate vote was strictly party-line. The final Senate vote was bipartisan, with 9 Republicans joining the DFL majority in favor.)

Opponents did not object to supporting schools; the debate centered on legislative flexibility versus constitutional protection:

• Statutory Control: The amendment removes the fixed formula from the Constitution and places the 4.5% distribution rate into state statute.
• The Legislative Risk: Skeptics noted that once the distribution policy is governed by statute, future legislatures could alter the payout rate or adjust how it is appropriated with a simple majority vote — bypassing the voters entirely.

Supporters counter that putting the rate in statute allows the state to adapt to modern economic conditions without waiting decades for another constitutional referendum.

4. The Ballot Hurdle: Why Leaving It Blank Means "No"

Minnesotans will see this question on their general election ballot on November 3:

"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?"

Under the Minnesota Constitution, passing an amendment requires a majority of all voters casting a ballot in the election, not merely a majority of those who vote on the specific question.

If a voter submits a ballot for governor, congress, or local council but skips this constitutional question, that blank vote is officially recorded as a "NO".

The Bottom Line for West Metro Voters

This amendment will not raise your property taxes, nor will it drastically reduce local school levy requests. It is a structural governance question: Should Minnesota modernize the investment and distribution rules of a 168-year-old trust fund to yield an extra ~$33 per pupil, while shifting future payout control from the state constitution into the hands of the legislature?

Minnesota Has a $2.3 Billion Educational Asset. What It Means for Plymouth Residents

This November, Minnesota voters will decide whether to amend the Constitution to change how the $2.3 billion Permanent School Fund supports public schools. What could this mean for students and families here in Plymouth?

PlymouthMN.comMilind Sohoni

Sources

• Minnesota House of Representatives - House File 3900 — Bill Summary Details | Conference Committee Report
• Ballotpedia, "Minnesota Alter Investment and Distribution Policies for Permanent School Fund Amendment (2026)" — legislative vote data (House: 134-0, Senate: 43-24, May 16, 2026)
• Minnesota Secretary of State — Constitutional Amendments (official ballot text)
• League of Minnesota Cities, "The 2026 Constitutional Amendment: What Cities Need to Know"
• CBS News Minnesota, "Minnesota voters to decide on constitutional amendment that would increase school funding," September 20, 2026
• Pioneer Press, "November ballot question: More money for schools without hiking taxes?," September 21, 2026
• Minnesota House Public Information Services, "Bipartisan bill aims to boost distribution of dollars from state's permanent school fund"
• Rep. Spencer Igo - Minnesota House of Representatives
• Minnesota Voting Information Portal
• Minnesota Secretary of State's Pollfinder

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