The Permanent Education Fund, an endowment created in the early days of Texas statehood, is supposed to ensure the health of Texas public schools. But a Houston Chronicle investigation has found that less and less of the fund’s proceeds are being used to fund education.
In 1854, the state’s founders feared that there might not be enough money to educate Texas kids in the future. So they created the Permanent Education Fund, setting aside $2 million for what the founders called “a sacred trust” Today, the money in that fund is the biggest educational endowment in the United States – bigger than that of Harvard – a whopping $44 billion. And yet, the state is spending less and less on schools, and local taxpayers are picking up more of the tab. It is a broken trust, say Susan Carroll and her colleagues at the Houston Chronicle. They conducted a yearlong investigation into where the money is going.
Carroll says the endowment does send money to schools, based on how many students attend. And it pays for textbooks.
“Within the last decade or so, it has sent less money to schools in real dollars than it did in the two decades prior,” Carroll says.
The amount of money spent by the fund per student is dropping because the number of students in Texas schools has grown so fast. At the same time, the fund has added $1 billion per year in oil and gas revenues, Carroll says.
“There was a law change in 2001 that allowed the School Land Board to retain the oil and gas royalties, instead of passively sending them to the the State Board of Education,” Carroll says.
The School Land Board has been reinvesting much of the money it collects, doing so more freely because the 2001 law allowed more kinds of investments, including stocks and real estate.
Carroll says money is sent to schools “most years.”
“The Land Board accumulated more and more of the inflow of royalties to the fund,” she says.
Written by Shelly Brisbin.