This November, Minnesota voters will decide whether to overhaul how the state’s Permanent School Fund sends money to public schools, a shift supporters say would bring in modest but steady dollars for districts without touching property or income tax rates. Lawmakers have pitched the measure as a way to drag an 1858-era trust into the present and relieve some budget strain for districts that have leaned on local levies and one-time patches.
What Voters Will Decide
The Legislature signed off on ballot language that would amend the Minnesota Constitution so that the fund’s annual distributable amount is calculated as 4.5% of the fund’s three-year average net asset value, instead of being capped at interest and dividends. If voters say yes, the change would kick in on July 1, 2027, for aid payable in fiscal year 2028. As laid out in HF 3900, the specific formula would live in state law, while the broader, long-term management rules would be locked into the constitution.
Task Force Found The Fund Has Grown
A state task force that reviewed the trust recommended the 4.5% target after finding that the Permanent School Fund had grown from roughly $675 million in 2010 to about $2.3 billion at the end of fiscal year 2025, and that it has posted average annual investment returns near 8% over the past decade. The panel concluded that the current 19th-century constitutional rule, which limits distributions to interest and dividends, has left a large share of gains sitting in the fund instead of reaching today’s students. The full analysis is detailed in the Permanent School Fund Task Force report.
How Much Districts Could Get
The proposal would not flood schools with cash, but it could matter for districts already counting every dollar. Larger systems are already seeing payments in the seven-figure range, including an example in which Minneapolis Public Schools received nearly $2 million in 2025, and many other districts bring in “hundreds of thousands” each year. Legislative materials and reporting highlight a hypothetical 2,000-student district that could see about a $60,000 boost under the new formula, money advocates say, which might help head off staff cuts or steep levy increases. As reported by The Associated Press, supporters also stress that the trust dollars are meant to supplement local budgets, not replace them.
Ballot Rules And The Math Of A Win
One wrinkle voters should know about constitutional questions in Minnesota: an amendment must earn a majority of all ballots cast in the election to pass. Leaving the question blank effectively counts as a “no” vote. That quirk has sunk amendments before, and it is a big reason proponents are planning a long education push through the summer and fall. The Minnesota Legislative Reference Library has documented this long-standing requirement along with the historical track record for statewide amendments.
Politics And Next Steps
The measure cleared the Legislature earlier in the session with broad bipartisan support. Sponsors argue that the change updates trust management for the modern era and offers schools a steadier funding stream without asking taxpayers for more. Supporters, including Rep. Spencer Igo and Sen. Mary Kunesh, have publicly stressed that the amendment does not raise property taxes or trigger local levies, and say they will spend the campaign season walking voters through how the formula works. Legislative reports and member releases trace the bill’s path to the ballot and capture sponsors’ arguments in favor.
If voters approve the amendment in November 2026, the statutory mechanics in HF 3900 would control distributions starting in fiscal year 2028. If the measure fails, the fund will keep operating under the current interest-and-dividend rules. Between now and Election Day, expect local districts and school associations to ramp up outreach around the fiscal modeling and what the changes could mean inside classrooms.
