The Texas Education Agency (TEA) issued the following press release on Sept. 30, 2014:
AUSTIN – Commissioner of Education Michael Williams and Texas Land Commissioner Jerry Patterson announced today that the Permanent School Fund has reached a record high value in 2014, making it the largest educational endowment in the country.
Created by the state in 1854 with an initial $2 million investment, the endowment has now grown to approximately $37.7 billion in market value as of June 30, 2014. Of that total, approximately $30.6 billion is managed by the State Board of Education and $7.1 billion by the School Land Board. Day-to-day oversight of the Fund is handled by staff at the Texas Education Agency (TEA) and the General Land Office.
“Through effective management by the State Board of Education, General Land Office and TEA, the Permanent School Fund continues to grow,” said Commissioner Williams. “The true beneficiaries of these sound investments are the schoolchildren across our state.”
Advancements in hydraulic fracturing technology, Patterson said, are also earning the school children of Texas hundreds of million dollars a year.
“The Texas oil and gas boom isn’t just fueling the nation toward energy independence, it is earning hundreds of millions of dollars a year for public education,” Patterson said. “For the first time ever, Permanent School Fund lands and investments managed by the School Land Board resulted in deposits of more than $1.2 billion into the PSF during 2014.”
A distribution from the Permanent School Fund is made every year to help purchase instructional materials and pay a portion of education costs in each school district. Since 1960, the PSF has distributed more than $23 billion to the schools. During the 2014-15 biennium, the PSF is distributing about $1.7 billion to the schools and anticipates distributing more than $2 billion during the next biennium.
“The State Board of Education exercises its constitutional authority as fiduciaries of the Permanent School Fund with careful deliberation and planning,” said SBOE Chair Barbara Cargill. “It is extremely gratifying to see such excellent results of our hard work as we strive to ensure that current and future generations of Texas schoolchildren will benefit from the fund.”
“Compliments to the outstanding work of both the Permanent School Fund staff and the GLO for maintaining sound and prudent strategies designed to protect and grow the Fund throughout market cycles, and resulting in such a healthy increase of the endowment that benefits all Texans,” said Patricia “Pat” Hardy, chair of the State Board of Education’s School Finance/Permanent School Fund Committee.
Along with providing direct support to Texas schools, the PSF provides a guarantee for bonds issued by local school districts and charter schools. The Permanent School Fund guarantee gives districts the equivalent of a AAA credit rating, the highest available. As a result, qualified districts are able to pay lower interest rates when issuing bonds, saving taxpayers billions of dollars. At the end of 2013, the PSF’s assets guaranteed $55.2 billion in school district bonds, providing a cost savings to 810 public school districts.
The Permanent School Fund’s $37.7 billion value as of June 30, 2014, surpasses that of the Harvard University endowment which stood at $36.4 billion at the same time.
To learn more about the Permanent School Fund, visit the TEA website at http://www.tea.state.tx.us/index4.aspx?id=2147485578&menu_id=2147483695.
To learn more about the Texas General Land Office’s management of its portion of the Permanent School Fund, visit the GLO website at http://www.glo.texas.gov/what-we-do/state-lands/permanent-school-fund/index.html.