Bills look at how schools can capitalize on trust land

/ 18 April 2012 / jennifer

Mark Sommerhauser, St. Cloud Times, April 18, 2012 –

ST. PAUL — Rep. Tim O’Driscoll sees untapped potential in millions of acres of Minnesota land set aside with the intent to benefit schools.

O’Driscoll, R-Sartell, and Sen. Benjamin Kruse, R-Brooklyn Park, want to change how the state manages 2.5 million acres of school trust lands, almost all of it in northern Minnesota.

Revenues from mining, logging and recreation on the lands go into a fund that generates about $25 million a year for Minnesota school districts. But O’Driscoll says the Minnesota Department of Natural Resources hasn’t done enough to maximize their value.

State policymakers may be nearing decision time on the proposals. Lawmakers met in a conference committee Tuesday and Wednesday to reconcile differences between the House and Senate bills authored by O’Driscoll and Kruse, respectively. Both chambers passed their versions of the bills earlier this session with broad bipartisan backing.

But Gov. Mark Dayton’s office isn’t saying if either version has the governor’s support.

And environmental groups fear the proposals, particularly O’Driscoll’s, could lead to overly intensive mining or logging of the school trust lands while expanding state government.

Both bills would create new state posts to manage the trust lands. O’Driscoll’s bill goes further, shifting oversight of school trust lands from the DNR to a new board whose members would be appointed by the governor.

Little-known asset

O’Driscoll says Minnesota’s school trust lands represent a little-known asset for cash-strapped schools.

At the start of statehood, the federal government set aside the lands in each Minnesota township to support schools. By the end of the 19th century, most of the land had been sold to private owners.

But the land that remains generates revenue for the state’s Permanent School Fund. Interest and dividend payments from the fund are doled out to Minnesota school districts twice each year.

O’Driscoll and others say the DNR hasn’t been creative or aggressive enough in maximizing return from the trust lands for the benefit of schoolchildren.

Some in northeastern Minnesota have long called for selling or swapping valuable school trust land within the Boundary Waters Canoe Area Wilderness that can’t be mined or logged due to federal and state restrictions.

Another approach O’Driscoll says hasn’t been tried: using funds generated under the state’s Clean Water, Land and Legacy Amendment to buy school trust lands — thus maintaining state ownership for conservation purposes while bolstering the school fund.

“I don’t think we’ve ever looked at this through the glasses of ‘what are our opportunities here?’ ” O’Driscoll said.

‘A ’70s solution’

Minnesota environmental groups see the school trust lands as a conservation asset for the woods and lakes of Minnesota’s northland. They contend the DNR has generally done a good job of balancing conservation with generating revenue for schools.

Activists such as Scott Strand, director of the Minnesota Center for Environmental Advocacy, worry that shifting oversight of the lands away from the DNR could trigger a rush to mine or log the lands too intensively.

O’Driscoll says such concerns are overblown. Maximizing return from the lands doesn’t mean “the chainsaws are coming,” he said. But O’Driscoll says if school trust lands are set aside for conservation, the trust should be compensated somehow, such as with Legacy funds.

Steve Morse, executive director of the Minnesota Environmental Partnership, says the O’Driscoll bill would expand state government unnecessarily. Morse, a former state senator and deputy DNR commissioner, says the department remains best-suited to manage the trust lands instead of a new board.

“That’s kind of a ’70s solution,” Morse said. “We can’t just be running around setting up new government agencies every time we want to fix something.”

Morse’s argument mirrors that of DNR commissioner Tom Landwehr, who says creating a new board to oversee the trust lands would cost almost $3 million a year while making management of the lands less efficient.

Small step

St. Cloud school district leaders say new money from the trust lands would be welcome, but likely wouldn’t be a game-changer for district finances.

The Permanent School Fund is providing about $27 per pupil for the St. Cloud school district during the current school year. That amounts to a total of $259,000, or about one-fourth of 1 percent of the district’s budget.

Bruce Hentges is a St. Cloud school board member who oversees legislative issues for the district.

Hentges says the most pressing state-funding issues for the district are the levels of funding for the K-12 formula and for special education.

However, Hentges says it appears there’s potential to generate more revenue from the school trust lands. He said he salutes O’Driscoll for examining how to better utilize them.

“There are bigger fish to be fried,” Hentges said. “But obviously, it’s a step in the right direction.”