Appropriations committee rejects bid to tap Common Schools Trust Fund for school construction; advances several related measures

The House Appropriations Committee voted to recommend a "do not pass" on House Concurrent Resolution 3,035, the proposal to place before voters a constitutional measure that would direct up to $300 million per year for 10 years from perpetual trust funds into a school construction program.

Representative Pat Heinert, who presented HCR 3,035 to the committee, said the resolution would “utilize $300,000,000 per year for 10 years totaling $3,000,000,000 from the perpetual trust funds established under Article 9 of the Constitution for School Construction Program.” He told members the resolution as drafted would divert distributions that currently benefit colleges and universities, schools for the blind and deaf, the state hospital, industrial schools and veterans homes as specified in Article 9, sections 12 and 13, and the Common Schools Trust Fund.

The committee heard extended testimony from Joseph Herringer, Commissioner of University and School Lands (the Land Commissioner), who presented projections showing long-term reductions to the Common Schools Trust Fund if the diversion occurred. “I do believe there are some major issues with this bill. I have some major concerns,” Herringer told the committee. Using an assumed annual return of roughly 6.72 percent, he testified the trust’s cumulative distributions could be reduced by about $4.4 billion over 30 years and the fund balance could be negatively affected by roughly $5.8 billion — a combined long-term impact he described as substantial.

Committee members pressed the sponsor and witnesses about implementation mechanics that are not specified in the resolution. Representative Kim Bosch asked how the program would determine which schools get money; Heinert said the resolution contains no distribution mechanics and that a separate bill on the Senate side was working toward a baseline assessment of school needs. When Representative Scott Richter asked whether the program would be loans or grants, Heinert corrected an earlier statement: “This is a grant program.”

Concern about long-term effects on per-pupil state aid and on the constitutional purpose of the Common Schools Trust Fund dominated remarks. Representative Matt Nelson noted that the trust’s distributions are currently used for per-pupil payments and warned the diversion could force the general fund to backfill aid if distributions decline. Representative Nathan…