Timber sales are up and reserve funds are swelling — but that will result in a relatively small revenue boost for K-12.
The state Land Board carved up dollars for endowment beneficiaries Tuesday — including public schools, the agency that receives the biggest chunk of these proceeds. K-12 will receive nearly $32.8 million in endowment proceeds for 2015-16, the budget year that begins July 1. That’s a 4.7 percent increase from this year’s $31.3 million.
For K-12, this represents a good news, bad news scenario.
The good news: The $1.5 million increase boosts a line item that has basically remained frozen since 2008-09. Save for a one-time, $22 million boost in the K-12 payment — endorsed in 2010, during a period of historic school budget cuts — the schools have received $31.3 million per year for six years.
The bad news: The payments for the seven other endowment beneficiaries will increase by 24.3 percent. State Hospital South in Blackfoot, for example, is in line for a 25.8 percent increase.
The funding disparity stems from a complex process of building budget reserves for the eight separate endowments. The state wants to back up each of the endowments with at least five years’ worth of budget reserves, a benchmark K-12 has finally reached.
It’s been a long slog, for a couple of reasons, said Larry Johnson, manager for the Endowment Fund Investment Board. First, the Land Board tried to maintain stable payments for K-12 from 2000 to 2009. Second, the state experienced an “unusual” drop in proceeds from timber sales earmarked to support K-12.
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But the timber proceeds are rebounding, Johnson told Land Board members Tuesday — and K-12 could be in for bigger paydays in the future. Johnson projected a $39 million payment for K-12 in 2016-17, and $44 million for 2017-18.
“The outlook, going forward, is very positive,” he said.
In past years, State Superintendent Tom Luna has questioned the emphasis on building K-12 endowment reserves — pushing unsuccessfully for larger payments to keep up with enrollment growth. For Luna, whose term ends at the end of the year, Tuesday marked his last chance to vote on an endowment payment for K-12. But after asking several questions about the long-range prognosis, he joined the rest of the board in supporting the payment plan.
The Land Board is comprised of five statewide elected officials: Gov. Butch Otter; Attorney General Lawrence Wasden; Controller Brandon Woolf; Secretary of State Ben Ysursa; and Luna.
The board will look different in the months ahead, with at least two new members. Both Luna and Ysursa are stepping down in less than four months.
At Tuesday’s meeting, that looming change was evident. Republican state superintendent’s candidate Sherri Ybarra was in attendance, and Democratic nominee Jana Jones showed up at the Statehouse hearing room shortly after the brief meeting adjourned. State Rep. Holli Woodings, the Democrats’ secretary of state candidate, was also in attendance.