In Utah, simple solutions for funding public education are hard to find. Robust enrollment growth in our schools presents a constant challenge to policymakers and taxpayers. This is where Constitutional Amendment B comes in — it is a small and prudent change to how certain non-tax education funds are distributed and invested that will make a big difference in Utah classrooms, and it is available for voters to approve on this year’s ballot.
Key to Amendment B’s impact is that it improves funding for the School LAND Trust program — a strictly controlled (and monitored) program administered at the local level by school community councils. The money goes straight to local public and charter schools, bypassing any form of bureaucracy, and is applied directly to each school’s most critical academic needs. This is why these are the most effectively and efficiently applied resources in Utah’s public education system.
These distributions to schools come from the $2 billion permanent State School Fund, purposed solely for funding public education in Utah and invested for growth and stability by a team of seasoned institutional investment professionals.
The state’s constitution currently limits distributions from this fund to "dividends and interest," which in recent years has yielded just over 2 percent — this translated last year into over $49 million distributed to Utah public schools.
Amendment B changes distributions from "dividends and interest" to "earnings" and places a protective 4 percent hard cap on those distributions. These changes allow for a small percentage increase in distributions that will provide millions of dollars in additional funding to the School LAND Trust program, while leaving ample room for continued growth of the fund and protecting it from excessive distributions that could deplete it over time.
The amendment also changes investment guidance language from "safe" to "prudent." This is a much-needed update, as "safe" does not appropriately match the fund’s inherent long-term objectives, while "prudent" investment standards are widely grounded and recognized in both legal and practical aspects of investment management. This change better aligns constitutional language with appropriate investment objectives.
The current distribution rate of 2 percent is shortchanging our schoolchildren of today. With the fund delivering long-term total investment returns of nearly 7 percent, there is clearly ample margin available for the fund’s continued growth, while allowing for modest increases in current distributions. Amendment B allows us to strike a better balance in apportioning these resources to all Utah schoolchildren — now and in the future.
David Damschen is Utah’s state treasurer. He also chairs the School and Institutional Trust Fund Board of Trustees, which oversees the investment of the permanent State School Fund.