Unclaimed lottery money could aid Minnesota schools

Brian Larsen

With a near-record number of school districts asking local voters to pass operating levy referendums this fall, it is clear Minnesota public schools are running short of dollars to fund their operations.

Created in 1971 by the Minnesota Legislature as part of the “Minnesota Miracle” school districts were given the authority to levy, with voter approval, for additional funds to cover district-operating expenses. In Cook County, voters passed an operating levy referendum for Cook County Schools/ISD 166 three years ago and the school district once again asked voters to pass an operating levy referendum in November 2015. The levy referendum failed.

Clearly, until the convoluted formula used to fund public education is overhauled, more reliable sources of revenue and better ways to operate school districts need to be found.

Until that time, one source of revenue could come from a bill introduced last winter by Republican legislator Tim O’ Driscoll, from Sartell, Minnesota.

O’Driscoll’s bill HF885, which was gaining strong bipartisan support before languishing in committee, aimed to take unclaimed lottery winnings and funnel them from the general fund into the School Trust Lands.

Gaming proceeds were originally supposed to be used for educational activities and some environmental work, said O’ Driscoll.

Currently the Minnesota Department of Natural Resources (DNR) manages 2.5 million acres of school trust lands and 1 million acres of mineral rights. When the Minnesota became a state in 1858, section 16 and 36 of every township were granted to Minnesota from the federal government to support school. A section is one mile by one mile.

Money is raised for schools and the environment from the land primarily through the sale of timber and mining leases. According to the DNR, it “manages school trust lands for maximum long-term economic return using sound conservation and natural resource practices.”

Revenues are credited to the permanent school fund, which is managed by the State Board of Investment.

O’Driscoll said school trust lands generate $27 to $28 per year per student.

Each year between $5 to $10 million in uncollected Minnesota lottery winnings goes into the general fund. This money would be used by the DNR to help purchase environmentally sensitive property that the state can add to the school trust lands.

Moving money from the general fund to the school trust lands fund creates a hole in the general funds, said O’Driscoll, “but the economy continues to grow and is doing well,” he said, adding that tax proceeds from the strong economy would grow the general fund and would likely cover the loss.

Across the state, the DNR has identified a rough value of $85 million in school trust lands that they would like to reunite with environmentally sensitive areas.

While money goes to all Minnesota schools, most of the school trust lands are located in the northeast quarter of the state.

Dorene Kainz, O’Driscoll’s legislative assistant, said that the bill doesn’t need to be reintroduced next March 2016, but brought forth again for further discussion and a possible vote.

“The problem we might run into is that other groups are looking at that unclaimed lottery money. That’s what happened last year,” said Kainz.

Just how much more money this bill would help generate for schools isn’t known at this time, but if it does pass it will strengthen the school trust fund, and that could lighten, if only slightly, the burden on the taxpayer.

O’Driscoll said $27 to $28 per student isn’t a lot of money, but he added that every little bit helps.

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2016-01-09 digital edition

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