MINNEAPOLIMEDIA NEWS | Minnesota Voters Will Decide Constitutional Change to Permanent School Fund

The November ballot proposal would replace the fund’s interest-and-dividend distribution method with a framework balancing annual school payments and long-term purchasing power. 

SAINT PAUL, MN (August 31, 2026) Minnesota voters will decide in November whether to amend the state Constitution and change how the Permanent School Fund is managed and distributed to public school districts.

The proposed amendment appears on the November 3 general-election ballot under the title “Increasing funding to school districts.”

The ballot question asks:

“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?”

Voters may select “Yes” or “No.”

What the Permanent School Fund Is

The Permanent School Fund traces its assets to lands granted for public education and proceeds associated with school trust lands, swamp lands and internal-improvement lands.

Cash and investments credited to the fund are managed as a permanent public resource benefiting Minnesota school districts.

The Constitution has historically protected the fund’s principal while allowing investment income to be distributed for public education.

It is separate from the state’s ordinary general-fund appropriations for schools and from local property-tax levies approved by school districts.

Proposed Constitutional Language

The amendment would require the fund to be invested and managed as a perpetual financial resource for the sole purpose of distributing money to Minnesota school districts.

Management would be designed to provide annual distributions while preserving the fund’s purchasing power and balancing the needs of current and future beneficiaries.

The language would also permit reasonable and necessary administrative costs associated with managing the fund or school trust lands to be paid from the fund as prescribed by law.

The Legislature would retain responsibility for establishing a distribution policy consistent with those constitutional principles.

Distribution Would Use Three-Year Average

The accompanying statutory changes would calculate the annual distributable amount as 4.5 percent of the fund’s average net asset value during the preceding three fiscal years.

The current framework focuses primarily on interest and dividend income.

Using a percentage of average asset value can make distributions less dependent on whether investment returns arrive as dividends, interest or changes in market value.

A three-year average may also reduce sharp annual fluctuations by spreading the effects of market gains and losses across multiple years.

The approach still carries risk. If distributions consistently exceed long-term investment growth after inflation and expenses, the fund’s purchasing power could weaken. The proposed constitutional language therefore directs managers to balance present payments with the interests of future students.

Effect on School Funding

Money distributed through the Permanent School Fund is apportioned among Minnesota school districts according to state law.

The amendment does not impose an individual income-tax or property-tax increase.

That does not mean school funding has no cost. The proposal concerns the distribution of investment assets already held in trust for education.

The practical effect will depend on the fund’s value, investment performance, the 4.5-percent formula and the statutory method used to divide the money among districts.

How the Amendment Passes

Minnesota constitutional amendments require approval from a majority of all voters participating in the election.

A ballot left blank on the amendment effectively counts against passage because the proposal must receive a majority of all ballots cast in the election, not merely a majority of voters who answer the amendment question.

Voters should therefore read the question carefully and record a choice if they want their position counted directly.

Effective Date

The Legislature authorized the question through Chapter 114 of the 2026 Minnesota session laws.

If voters approve the amendment, the statutory distribution changes will take effect July 1, 2027, for school aid payable in fiscal year 2028.

If the amendment is rejected, the related statutory changes will not take effect.

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