Texas Permanent School Fund passes $7 billion mark

Deposits to the state Permanent School Fund (PSF), which helps finance public education, have topped the $7 billion mark, Texas Land Commissioner Garry Mauro recently announced. The most recent deposit report shows the fund has received $7,031,341,521 from the Texas General Land Office's management of state land and mineral rights dedicated to the fund, currently 13.3 million acres. The fund was created in 1854, but about half the deposit total has come during Mauro's tenure as land commissioner which started in 1983.

"We've had to fight many tough fights over the years, both in court and in the Legislature. But it's clear that our policies -- policies that encourage oil and gas exploration but which also insist on a fair market value in return for our finite resources -- have paid off handsomely for public education in Texas," Mauro said.

Mauro also noted that through April of the current fiscal year the land office has deposited $161.5 million into the PSF, representing a 16.06 percent increase over the same period during fiscal 1997. The state fiscal year starts September 1 and runs through the following August 31.

"Incentives to lease, incentives to put production on line early, and incentives to drill offshore in state waters have resulted in a significant cash infusion for the PSF," Mauro said "These results are even more remarkable when you consider oil dipped as low as $14 a barrel earlier this year."

Mauro's willingness to go to court to protect PSF interests or settle boundary disputes has resulted in a number of decisions which favor the fund. Two major cases decided during the last few years -- the Turner and Summit suits -- ended favorably for the state and added millions to the PSF.

Litigation filed in 1995 in behalf of the land office against nine major oil companies charged they underpaid royalties to the PSF by hundreds of millions of dollars. One of the defendants, Chevron, has settled, and the remainder of the case is currently in the hands of a federal court in Corpus Christi. A favorable ruling could result in hundreds of millions of extra dollars for the fund plus additional money for thousands of private royalty owners as it was filed on a class-action basis.

In addition, PSF revenues have been greatly increased through the success of a commercial leasing program designed to get full value for surplus state land. This includes the recent sale of 4,300 acres of state land in a growth corridor in El Paso County for $67 million -- the largest state sale in recent times and the biggest ever dollar-wise.

Factoring in its investments, the Permanent School Fund now has a market value of more than $17 billion. It transfers about $700 million per year to the Available School Fund which makes distributions to school districts. This transfer amounts to about $215 per student.