Jared Polis Foundation Education Report: Issues

Introduction
Did you know that 93% of the lands owned by the State of Colorado belong to public schools? In 1785, Congress began granting large areas of land to newly created states for the support of public schools. When Colorado gained its statehood in 1875, Section 7 of the Colorado Enabling Act required that the land and its income “are hereby granted to the said state for the support of common schools.” And the Colorado Constitution states that, “The people of the state of Colorado recognize that the state school lands are an endowment of land assets held in a perpetual, inter-generational public trust for the support of public schools, which should not be significantly diminished.”

Colorado was originally granted 4.4 million acres of school lands. Today, there are 2.6 million surface acres and 3.8 million mineral acres that generate money for schools, which is held in a trust fund called the “permanent fund.” Table A shows the current school land acreage in 15 states.

These lands are managed and invested by the state land boards, or their respective counterparts, and produce revenue each year from activities such as grazing, timber and land sales, as well as mineral and surface leases. According to the Children’s Land Alliance Supporting Schools (CLASS), a non-profit corporation organized to provide information and services to education communities, the total income from uses of school lands totaled more than $2.4 billion in fiscal year 2006—please see Table B for details.

Each year, a portion of the income from school trust lands is distributed to schools, while another portion is deposited back into the trust, which increases the value of the permanent fund. In fiscal year 2007 Colorado’s permanent fund was worth approximately $486.3 million. Table C shows the current market value of other states’ trusts.

Sources of Income to Colorado’s Permanent Fund
Colorado’s school lands generate revenue in two ways: 1) From surface uses such as cattle grazing and farming, timber harvesting, commercial and residential leases and sales, and recreation (hunting, fishing, and camping), and 2) from mineral uses, such as oil, natural gas and mineral leases.

During the last fiscal year, $48.3 million (83%) of total income was generated from mineral uses, while $9.9 million (17%) was surface use income, according to the Colorado Board of Land Commissioners. The largest sources of income were gas royalties ($19. 3 million), coal royalties ($15.3 million) and agriculture, grazing and other rentals ($8.9 million).