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

By Dr. Milind Sohoni

If you live in Plymouth and have children in our public schools, you probably pay close attention to school funding. We talk about property taxes, state education funding, referendums and the difficult choices school districts must make to balance budgets while continuing to serve students well.

This November, Minnesota voters will have an opportunity to weigh in on another question about how we fund public education. A proposed amendment to the Minnesota Constitution would change how money from the state's Permanent School Fund is distributed to school districts. If approved by voters, the change would take effect in 2027 and is intended to provide larger, more predictable distributions to Minnesota schools—without creating a new individual income or property tax.

There is a good reason this question is on the ballot: Minnesota has an educational asset worth approximately $2.3 billion that has been serving public school students for more than 150 years.

It is the Permanent School Fund.

Every Minnesota public school district and charter school receives a share of its annual distributions based on student enrollment. The money can support everything from instructional materials and curriculum to teacher salaries and school facilities.

For a state that regularly debates how to provide adequate and sustainable funding for public education, this is an asset worth understanding.

An old formula for a modern fund

The Permanent School Fund was created from lands granted to Minnesota by the federal government. Revenue from those school trust lands continues to flow into the fund, which is invested by the State Board of Investment for the benefit of Minnesota's public school students. The principal is intended to remain a permanent resource.

The challenge is that the way Minnesota currently calculates distributions does not fully reflect how the fund is invested today.

Under the current system, distributions are primarily tied to interest and dividend income rather than the fund's overall market value.

That distinction matters because the fund itself has grown substantially—from about $675 million in 2010 to approximately $2.3 billion in 2025. Yet the amount distributed to schools has not grown at the same pace.

A state task force studied this issue and recommended a more modern approach: distribute 4.5% of the fund's average net asset value over the preceding three fiscal years.

The three-year average matters. It is designed to smooth the effects of market fluctuations rather than tying school funding to the performance of a single year. The task force concluded that this approach would provide more predictable distributions while maintaining the fund as a perpetual financial resource for future generations.

What could this mean for schools?

The difference is meaningful.

In fiscal year 2025, Minnesota schools received approximately $58.6 million from the Permanent School Fund. Based on the same year's fund values, the proposed formula would have produced approximately $86.4 million—nearly $28 million more statewide.

That money would be distributed across Minnesota's public school districts and charter schools on a per-student basis.

For a district such as Wayzata, that does not mean the Permanent School Fund suddenly solves the district's budget challenges. It doesn't. The amount each district receives is modest compared with its overall operating budget.

But education funding is built from many sources, and recurring revenue matters. An additional, constitutionally dedicated source of funding can help districts make choices about instructional programs, staffing, materials, activities and other student needs.

And importantly, this is not a new tax. The proposal changes how an existing educational asset is used; it does not create or increase an individual income or property tax.

Stewardship means thinking about tomorrow, too

As someone who serves on a local school board, I believe strongly in responsible stewardship of public resources.

That means asking two questions at the same time:

How do we meet the needs of students today?

And:

How do we make sure the resources entrusted to us remain available to students tomorrow?

Those principles should apply to the Permanent School Fund as well.

The proposed approach is intended to do both. The fund would remain invested. The underlying school trust lands would remain in place. The fund would continue to benefit Minnesota public school students in perpetuity. And using a three-year average is specifically intended to provide stability rather than simply increasing distributions based on a single year's investment performance.

This is not about choosing today's students over tomorrow's students.

It is about determining whether Minnesota's rules for using this century-old educational asset are keeping pace with modern investment practices while preserving the asset for future generations.

Why Plymouth should pay attention

Plymouth is home to families who care deeply about the quality of our public schools. We have seen firsthand that maintaining strong schools requires thoughtful planning, community investment and careful stewardship of resources.

The Permanent School Fund is another piece of that picture.

Whether you have children in Wayzata Public Schools, another west-metro district, or no children in school at all, this is a statewide educational asset that belongs to Minnesota's students.

As Minnesotans consider the proposed constitutional amendment this November, I believe the most important thing we can do is understand what the Permanent School Fund is, how it works today, what the proposed changes would do, and how those changes would balance the needs of current students with our responsibility to future generations.

Minnesota has spent more than 150 years building this educational asset.

The question before voters this November is how to make sure it continues to serve students well for the next 150.

Dr. Sohoni is a Minnesota School Boards Association Board Director and a Wayzata Public Schools School Board member.