Land Board Votes to Transfer $300 Million to School Fund

The School Land Board voted Tuesday to release $300 million into the Available School Fund for public schools.

The money will be released in two $150 million installments, one in February and the other on June. The funds had been caught in a standoff between the Legislature and the School Land Board, which operates out of the General Land Office and oversees the state’s public school land.

A constitutional amendment proposed in 2011 by state Rep. Rob Orr, R-Burleson, allowed the board to put a portion of earnings from investments on real estate assets into the Available School Fund, which along with property and sales taxes helps pay for public education.

Voters passed the amendment last November, but the little-watched School Land Board decided not to distribute the money in July. Land Commissioner Jerry Patterson, who sits on the three-member board, said it wanted to protect the funds for upcoming investment opportunities.

"It’s the age-old question of whether you save the money to send your kids to college or borrowing when they do,” he said at a House appropriations meeting in December.

Usually the proceeds from the sale and management of public school lands would go into a $26 billion trust whose revenue feeds into the Available School Fund. Proposition 6 made it so that the School Land Board, if it chose, could bypass that step and put money directly into the fund.

Last session, expecting the board to follow through with the transfer, lawmakers added a provision to the appropriations bill that reduced general revenue funding to public education by $300 million if the amendment passed. It was to be replaced with the same amount from the Available School Fund with the board’s approval — but there was no provision to add that money back in if that didn’t happen. That meant in July, lawmakers were left with a $300 million hole in the budget.

After the July vote, the liberal group Progress Texas targeted the Land Office with a campaign calling on Patterson to release the funds. The commissioner also came under fire at the December appropriations meeting. When committee members questioned Patterson, he said that the amendment left the decision of whether to transfer the money up to the discretion of the board and that he had made no promises that would happen.

House Appropriations Committee Chairman Jim Pitts, R-Waxahachie, disagreed. "Every single member of this committee, the comptroller, we all expected that 300 million and now you’re saying it's discretionary," he said, "We didn’t put the word discretionary, we put the word allow."

Tuesday, Patterson, one of three land board members, cast the only vote against the transfer. He criticized lawmakers for passing a budget that addressed short-term problems without considering the long term.

"We need to strive to do better," Patterson said in a statement afterward. "Spending down our kid's trust fund to pay today's bills is a path I don't want to go down any further. Fortunately, the fund is healthy enough to protect Texas schools from one year of bad budgeting.”

He added that he would oppose future "legislative raids" on the fund.

Texas Tribune donors or members may be quoted or mentioned in our stories, or may be the subject of them. For a complete list of contributors, click here.