BNB Note:
Below, is a guest editorial from State Senator Mary Kunesh (SD39-DFL). Senator Kunesh is the Chair of the Senate Education Finance Committee and a lead author of the legislation that placed the Permanent School Fund constitutional referendum on the ballot for voters to answer this November.
On the November 3, Minnesotans will face a simple question on their ballots:
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?
Ought we update the way our state’s Permanent School Fund (PSF) supports public education? The answer should be a resounding YES! This amendment is not about raising taxes or creating new bureaucracy—it’s about unlocking the full potential of a 165‑year‑old trust to meet the needs of today’s and future students.
Every child in Minnesota deserves a fair shot at a quality education, no matter where their school district might be. Yet our state’s Permanent School Fund—grown from $675 million to $2.5 billion over the past ten years—operates under outdated restrictions, thus limiting its impact. The proposed constitutional amendment is a chance to align our values with our policies, ensuring that this public trust truly serves the public good of every public-school student in Minnesota.
In 1858, when Minnesota became a state, our founders set aside millions of acres of land to generate income for public schools. That foresight created the Permanent School Fund, a trust that has quietly supported generations of learners – making every child in Minnesota a “trust fund baby”. The rules governing the fund were written 165 years ago – written for a different century. This 2026 constitutional amendment offers a rare chance for Minnesotans to bring those rules into the modern era.
The Department of Natural Resources manages these lands—historically through timber sales, mineral leases, and other activities—and invests the proceeds. The earnings are distributed annually to public school districts on a per‑pupil basis, twice a school year.
Since the establishment of the PSF, the Minnesota Constitution imposes strict limitations on how the fund is managed and how its earnings are calculated. These rules were designed in the 19th century to protect the fund’s principle, but unfortunately, they also prevent modern investment strategies that could yield higher, more stable returns.
This amendment, passed with bipartisan support in the Legislature, will make a positive impact for our schools – distributing an increase from 2.5 % of interest and dividends to 4.5% of interest, dividends, and capital gains. For some districts this adjustment will add hundreds of thousands of much needed financial support to school districts, for other districts, millions. While we know this will not fill all of the holes in the education bucket, it will make a difference to every school district in some way. We know that the PSF is not the answer to all of our prayers, but it is a stable, dedicated revenue source that can help cushion districts against economic swings.
These are no nonsense changes that do three things:
Modernizes investment authority by allowing the State Board of Investment to use contemporary portfolio strategies, similar to those used by other large public trusts.
Adjusts distribution formulas, thus ensuring more predictable and potentially larger annual payments to schools.
Preserves the fund’s principle while maintaining constitutional safeguards to ensure the fund remains a perpetual source of support.
Importantly, the amendment does not raise taxes. It simply changes how the existing fund is managed and how its earnings are distributed.
Under current rules, the fund’s growth is artificially constrained. Other states with similar trusts—such as Texas and North Dakota—have adopted modern investment policies that have significantly increased their annual distributions to schools. Without approval of this amendment, Minnesota risks leaving millions of dollars on the table each year by clinging to outdated formulas. That’s millions of dollars not reaching our students every year.
What we are doing is more than dollars and cents. It’s about honoring the intent of Minnesota’s founders while adapting to the realities of the 21st century. The PSF was created to ensure that every generation of Minnesota’s children benefits from the state’s natural resources. By updating its management, we can fulfill that promise more effectively, ensuring that legislators fulfill their fiduciary responsibilities to not only students of today, but for generations to come.
We all know that Minnesota’s public schools face mounting challenges: transportation and inflationary costs, teacher shortages, and widening achievement gaps. As the Chair of Education Finance in the Senate, I hear from Superintendents, Administrators, teachers, and parents about the current educational struggles. They’re reminiscent of the twenty-five years that I worked as a public-school Library Specialist, and this ballot question is just one of our efforts to turn these trends around. This amendment has been vetted by education leaders, lawmakers from both parties, and fiscal experts. It reflects a consensus that the current system is outdated and that change is both safe and beneficial for public schools, today and far into the future.
So, make your voting plan this year, join me in filling in the YES bubble on your November ballot – and be aware - anything other than a yes is counted as a no.
We can do this, vote yes for our students!