School Trust Lands
Texas
Texas is the one state in the country where the school trust was never a federal grant to begin with. When Texas joined the Union in 1845, it joined as a sovereign Republic merging into another, and it brought its own public lands with it. There was no federal land office to survey out Section 16. There was no 1785 Land Ordinance to invoke. The federal government held no title to transfer.
That single fact reshaped everything that followed. The 1854 legislature endowed a Special School Fund from the proceeds of the territorial settlement with the United States. The 1876 Constitution then took the move other states never made: it dedicated half of the remaining public domain to the schools, named the beneficiary class in Article VII, segregated the corpus, and barred the legislature from rescuing defaulting purchasers. In 2021, the Eighty-Seventh Legislature consolidated investment under the Texas Permanent School Fund Corporation.
The result is visible in the fund balance. The Texas Permanent School Fund today is the largest educational endowment in the United States — larger than every other state school fund combined. The corpus is large not because Texas had more land than its peers. Utah, New Mexico, and Arizona each received four sections per township. The Texas corpus is large because the lands were treated as Texas's own promise to its own children, written into the state constitution and defended there. Texas is the control case for what every state should have built.
FY 2024
On May 20, 1785, the Continental Congress provided land to support schools as each new state joined the union. “There shall be reserved the lot No.16, of every township, for the maintenance of public schools within the said township.” The federal school-land grant ultimately reached a national scale, and school-trust lands still span tens of millions of acres across the public-land states. Public accounting gathered by ASTL documents more than $100 billion in school-trust assets and more than $1 billion in annual distributions in the most recently reconciled national accounting; current fifty-state figures are being rebuilt state by state. However, few educators or members of the public know about school trust lands. Advocates for School Trust Lands is sharing this grand history of America’s founding vision for schools, hoping that over time Americans will know of school trust lands and their support for public schools.
Texas entered the Union as an independent republic in 1845 and retained all of its public lands. The Texas Permanent School Fund was created with a $2 million appropriation by the Texas Legislature in 1854, expressly to benefit public schools in Texas. In 1873, the Texas Legislature set aside one-half of the remaining public domain to benefit public schools. The Permanent School Fund consists of all land and all revenues derived from the land or other properties appropriated for the support of public schools. Today, the Texas General Land Office (GLO) manages over 12 million acres of school mineral rights and almost 1 million school surface acres. Most of the lands are scattered in the western part of Texas near El Paso.
In FY 2024 Texas generated $1,630,030,661 from its school trust lands. Oil and gas always generates the greatest revenue, followed by surface uses and minerals. Texas has 10.35 miles out from shore as their seaward boundary. All revenue from these shoreline submerged lands also goes to schools.
How does this revenue get to schools and benefit students? Beginning 2007 under the direction of the Land Commissioner, the General Land Office invests the revenue from minerals, farming, grazing, and various other endeavors and deposits them in the Real Estate Special Fund Account (RESFA). This invested revenue is also part of the Texas Permanent School Fund. Revenue prior to FY 2007 was all invested in the Texas Permanent School Fund by the Texas Education Agency. States like Texas that invest all their revenue in their school fund have more money to support schools, just as people who save have more money than those who spend. Prudent investments, compounded over time, generate greater returns for schools. The Texas Permanent School Fund is the largest school trust fund in the nation, and the second largest educational endowment. One portion of the fund is invested by the Texas Education Agency. The Real Estate Special Fund Account (RESFA) is invested by the General Land Office primarily in large infrastructure investments. The total weighted return on all investments for FY 2024 was 7.31%, among the highest of all the states.
Because of the careful management and investment of the funds within both parts of the Permanent School Fund, $2,156,354,137 was distributed in FY 2024.
Various states use trust funding differently. Texas distributes billions for instructional materials, technology, and other expenses for public and charter schools. Wisconsin funds school libraries, Washington and Colorado build schools in rural parts of the state, Arizona funds classroom needs, Minnesota and South Dakota send much needed additional funding directly to each local school district, and Utah allows parents, teachers, and the principal elected in every school to develop programs to improve academic performance. Most other states put the investment distribution to schools into the overall education funding pot, usually supplanting other revenue with that from the children’s trust. Those states are not ibn compliance with their enabling acts which in every case granted the lands for the support of common, public schools.
FY2024 at a Glance
| Acres granted at statehood | Retained as independent republic (1845); 1873 set aside half of remaining public domain; PSF capitalized $2M (1854) |
|---|---|
| Surface acres currently held | ~1 million school surface acres |
| Mineral acres currently held | ~12 million school mineral acres |
| FY2024 gross revenue | $1,630,030,661 (oil & gas dominant; submerged-lands revenue included) |
| FY2024 PSF market value | Largest school trust fund in the nation; second-largest educational endowment overall |
| FY2024 distribution to schools | $2,156,354,137 |
| Total weighted return on all investments (FY2024) | 7.31% |
Data: ASTL FY2024 state report. Some figures are pending or carried from prior years where indicated.