Texas Constitutional Amendment #6 — a Raid on PSF
By Donna Garner
I am not an expert on the 10 Texas Constitutional amendments that will be on the Nov. 8, 2011ballot (http://www.sos.state.tx.us/elections/forms/proc-nov8-2011.pdf ), but I do know that the one on the Permanent School Fund (Amendment #6) is a raid on the PSF assets held by the Government Land Office.
These assets were previously exempt from distribution and would normally be invested by the elected Texas State Board of Education members (considered to be a part of the Executive Branch) who have done a magnificent job of protecting the PSF and helping the PSF corpus to grow even during the downturn in the economy.
I believe that there are certain Texas Legislators who may be behind this wrong-headed amendment that has such a flowery caption most people may not know to vote against it. These Legislators have wanted to get their hands on the PSF “pot of gold” for a long time, and they resent the fact that the elected Texas State Board of Education members have the fiduciary responsibility over the PSF instead of the Legislature.
Of course, we know that if these Texas Legislators controlled the PSF funds, the funds would be raided constantly until there would be no money left for public school children’s textbooks (i.e., now called “instructional materials”).
Excerpts from SBOE Member Ken Mercer’s newsletter, 5.26.11:
The PSF is commonly known as the “children’s textbook fund.” The state’s early-day founders created the endowment to help fund public education; and since 1919, the PSF has been used to ensure that Texas schoolchildren receive free textbooks.
However, because of the economic downturn after the Civil War, the original fund was raided and depleted by the 1865 Legislature.
Land Commissioner Jerry Patterson reminded the Senate Finance Committee at its April 19, 2011, meeting that in 1876 Texas changed its Constitution to forever protect the children’s textbook fund from any future raids. That is why the legal term today is the “Permanent” School Fund.
When I took my oath of office as a State Board of Education member, I promised to uphold the Constitution, which demands that the SBOE protect and preserve the PSF for future generations, and use any proceeds to provide free textbooks for our 4.8 million public schoolchildren.
The Texas Constitution provides a key tenet of American exceptionalism: the separation of powers. Permanent funds are managed by the executive branch, separate from those who appropriate funds, i.e., the Legislature. This Constitutional separation should prevent any attempt to raid an endowment fund meant to be permanent…
In 2010, under the leadership of SBOE Chair Gail Lowe (R – Lampasas) and then-PSF Committee Chair David Bradley (R – Beaumont), critical discussions were held with Lt. Governor David Dewhurst and Land Commissioner Patterson to help ensure the SBOE could pay out the most PSF funding possible while still being prudent in managing the endowment for the long term.
The results were a payout from earnings, as allowed by the Constitution, of $1.2 billion for the current budget and another commitment of $1.8 billion for education for the upcoming biennium. The careful management by the members of the SBOE had resulted in protecting the principal (e.g., corpus, assets) of the fund. This was a major accomplishment by the SBOE.
Bottomline: We need to encourage Texas voters to vote against Amendment #6. Here is the innocent-sounding wording of the amendment, but we Texas voters need to be smart and vote against this raid on the PSF:
“The constitutional amendment clarifying references to the permanent school fund, allowing the General Land Office to distribute revenue from permanent school fund land or other properties to the available school fund to provide additional funding for public education, and providing for an increase in the market value of the permanent school fund for the purpose of allowing increased distributions from the available school fund.”