ST. PAUL — As Minnesota school districts face increasing financial challenges, the Legislature has passed a proposed constitutional amendment to increase funding for schools without raising taxes or dipping into the state’s general fund.
The proposal, passed on May 4 in the House and Thursday, May 7, in the Senate, would increase the amount of money spent each year from the Permanent School Fund, if voters approve the change in November. The Senate made one change to the bill, so it must go back to the House for final approval.
The Permanent School Fund uses revenue from the sale of timber, minerals and land on 2.5 million acres of School Trust Lands to fund public school districts and charter schools around Minnesota. The trust lands were federal land grants established when Minnesota became a state in 1858.
During the 2024-25 school year, the department of Education distributed a record $58 million from the Permanent School Fund to the state’s 329 public school districts and 181 academies and charter schools.
Despite lawmakers passing a $26 billion package in 2025 to expand per-student funding for K-12 schools, districts are still facing budget problems. Contributing to the financial stress on schools was a state cut of $250 million in special education funding in the two-year state budget passed last year and an out-of-date method of determining eligibility for compensatory revenue for students from low income families.
The bill, sponsored by Rep. Spencer Igo, R-Wabana Township, proposes increasing the Permanent School Fund annual distribution amount from 2.5% to 4.5% of the fund’s net asset value at the end of every three years.
“The best part about this constitutional amendment: It's going to cost the taxpayers of Minnesota zero dollars, because we've done such a good job managing the money and because this is money that these kids are entitled to,” Igo said.
If approved by voters, the amendment is projected to increase the amount schools receive per pupil from $68.24 to $95.53, a nearly 28% increase, Igo said.
Minnesota taxes will not increase as a result of this amendment, and schools will be able to determine how they wish to spend the money they receive from the school fund.
“This bill is not just another piece of legislation. It represents a commitment to invest in the future,” said Sen. Mary Kunesh, DFL-New Brighton, the Senate author of the bill.
The measure gained strong bipartisan support, leading to a rare unanimous 133-0 vote in the House and a 59-8 vote in the Senate. Unlike other bills, once the Legislature passes proposed constitutional amendments, they bypass the governor and go directly to the ballot.
“These funds come as a way for school districts to stop the gap,” Igo said in a meeting earlier in the session. “In my district, sometimes this is the difference between cutting a teacher or not. Other times, it's making sure to fix the leaky gym. Other times it’s making sure that the school buses can get upgraded so they can keep going out in the cold.”
“I think it's great that we've set aside and made Minnesota's public schools a priority from the founding of Minnesota,” Rep. Sydney Jordan, DFL-Minneapolis, said. “But this is a really more modern way to manage our money with stocks and dividends and investments.”
Rep. Roger Skraba, R-Ely, who represents the majority of acres that are in the school trust land, called the Permanent School Fund the “gift that keeps on giving” because it continues to provide money for all students at no cost to Minnesotans.
“Whether you're in Edina, in Ely, in Roseau, in Sleepy Eye, in Rochester, it doesn't matter where you are. You're going to benefit,” Skraba said.
Report for Minnesota is a project of the University of Minnesota’s Hubbard School of Journalism and Mass Communication to support local news across the state.
