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Serving Northern St. Louis County, Minnesota

School trust lands

Change in law and policies won’t make a difference for schools

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In recent weeks, we’ve reported on some of the on-the-ground impacts of a change in state law and Department of Natural Resources policies that requires foresters and other state land managers to maximize the economic return on roughly 2.5 million acres in northern Minnesota dedicated to the state’s Permanent School Trust.

Four years ago, the Legislature amended the law governing these lands to enshrine economic return as the top priority for managers. A few months later, the DNR adopted new policies that moved in that direction. The overall impact of those changes are subject to debate, although it’s reasonable to assume that those effects will grow over time. As they do, the myriad of other traditional uses of these public lands, from hunting to hiking, from bird-watching to snowmobiling, will take a back seat to logging, mining, or other extractive uses. The new policy will also, in effect rob Peter (the state’s taxpayers) to pay Paul (the school trust).

We don’t fault DNR officials, who are simply trying to implement policies adopted by the Legislature to the best of their ability. It was legislators who sold these changes on the smiling faces of our school kids. The argument goes that by increasing the financial return from the state’s school trust lands, the trust fund will grow more quickly and we’ll have more money every year for schools. But, like those bake sales that many schools use to pick up a little extra cash for incidentals, the funding that schools receive from the school trust will never be more than a tiny drop in a very large bucket.

As of last year, the annual proceeds from the school trust contributed $29 per student in Minnesota. That’s out of the roughly $10,500 in state, local, and federal funds that the state currently spends per student. That amounts to less than 0.3 percent of our K-12 spending.

Supporters of the change in policy say that by taking action now to increase the return to the trust, schools will benefit much more in the future. But those making such arguments must have lost their calculators. Even if one goes wild and assumes such policies can double the rate of growth of the school trust over the next forty years, the additional funds are negligible. Here’s the math: Assume that the trust fund would grow by a factor of five over the next four decades under earlier policies, which allowed the DNR to balance the various uses of school trust lands. Such a rate of growth would increase the per student payment (assuming the same annual rate of return) from $29 today to $145 in 2055. But add in the effects of inflation, according to the Bureau of Labor Statistics, and the actual value of that $145 would be equivalent to $33 in today’s money.

Doubling that amount would boost the inflation-adjusted payout to schools to be sure, but at a whopping $66 per student, or 0.6 percent of total funding, schools wouldn’t even notice.

The numbers don’t lie. Unfortunately, politicians sometimes do. And in this case they’ve used the hollow promise of helping school children to pressure the DNR to focus on resource extraction at the expense of other values of the forest that most Minnesotans hold dear.

Some of the changes resulting from this policy shift border on the bizarre. It turns out a sizable percentage of the school trust lands, as much as a quarter, is comprised of stunted forest growing across northern Minnesota’s vast peat bogs. Their only real value is wildlife habitat, but if these lands are officially reserved for that purpose, the DNR will now be required to reimburse the school trust for the value of the habitat. And where will the money come from? The Legislature will have to appropriate it from tax dollars. Robbing Peter to pay Paul.

And there’s more. The DNR recently announced it will be cutting planted red pine stands every 60-70 years in the future, rather than the 100 year rotation that had been the norm. When those sites are logged on school trust lands, one might assume that the proceeds from the sale would cover the cost of preparing and re-planting the land. But the state issues bonds to cover those costs, so the school trust doesn’t have to pay. In effect, the state is borrowing money, at interest, to add it to the school trust. Don’t try to do the math on that— it will only make your head spin.

There is, unquestionably, a significant role for resource extraction from northern Minnesota’s forests. Done right, we can have a healthy wood products industry and public lands that can provide for multiple uses at the same time. That was the framework that Minnesota led the nation in establishing back in the 1990s, and this change in law and policy is an unfortunate step backwards. If lawmakers feel the change is justified, let them argue it on its real merits, then Minnesotans can decide based on the facts. But, for once, can we just skip the fiction that it’s “all about the kids.”