Final
School Trust Lands
COMMITTEE ON
JOINT EDUCATION
Votes:
Action Taken:
<none>
<none>
07:37 AM
The meeting was called to order by the co-chairman, Representative Merrifield.
07:37 AM
Pamela Suckla, chairman of the State Board of Education, discussed her history of involvement in the state school trust land issue and the importance she places on the issue.
07:38 AM
Karen Gerwitz, Director for State Board of Education Relations, discussed her involvement as a representative of the State Trust Land Steering Committee. She recognized other members of the Steering Committee in the audience. She described the history of the trust lands and the responsibility of the state for managing the trust lands. This management is done through the State Land Board and the State Treasurer's Office.
07:42 AM
Ms. Gerwitz utilized an audio-visual presentation to review the issues involved in the trust lands. Seven hand-outs were distributed (Attachments A through G). The land was allocated in 1875, with two sections provided at that time. Senator Williams asked for a list of the other trust lands in the state. Sales and trades have impacted where the school trust lands are now. She said that the land, as consolidated, would represent approximately 4 percent of Colorado's area. The trust includes the land, mineral rights, and the corpus of the Permanent School Fund.
07:47 AM
Ms. Gerwitz said the money from the Permanent School Fund provides about 1 percent of school funding currently. She further indicated that some states such as Arizona, Washington, and Utah "earmark" their school trust land funds.
07:49 AM
Ms. Gerwitz discussed the flow of money associated with school trust land revenue. She discussed the flow both to the Replacement Property Fund and to the Permanent School Fund. She said that the goal of the Steering Committee is to grow the Permanent School Fund and to address lease income.
07:54 AM
Ms. Gerwitz discussed the current obstacles to growing the Permanent School Fund. One of these is a constitutional requirement that Permanent Fund losses be replaced by the General Fund moneys. There may be possible statutory changes required before the State Treasurer can consider investing in longer term, but potentially higher yielding investments. Ms. Gerwitz's presentation continued with a discussion of the fact that revenue from the School Land Trust is the first payment into the School Finance Act.
Representative King asked further questions about the potential legal or constitutional issues involved in the supplanting of revenue.
08:01 AM
Ms. Gerwitz provided more specific descriptions of what other states are doing. Utah, New Mexico, and Arizona are three examples of states making their trust land revenue grow. She provided a graph showing the sources of Colorado's trust land revenue, of which mineral revenues comprise almost two-thirds of total revenues. Brit Wagner, Director for the State Land Board, came to the table to provide several pieces of additional information. Ms. Gerwitz provided more information about the administration of the land by the State Land Board.
08:07 AM
Ms. Gerwitz made closing comments about issues for consideration by legislators. As presented by the Steering Committee, these issues include the fact that:
the Permanent Fund is not growing;
the State Treasurer is forced to invest in low-risk, lower-yielding investments;
interest revenue and lease revenue is spent almost in its entirety every year; and
Permanent School Fund revenue is the first allocation to the School Finance Act.
08:11 AM
Ben Stein, Deputy State Treasurer, came to the table to respond to questions about the investment strategy involved in school trust land revenue. Mr. Stein reviewed some the statutory history involved in school trust land investments. He responded to further questions about the current investments and statutory requirements. Ms. Gerwitz referred to comparisons with other states provided in one of the hand-outs, which is Attachment E.
08:18 AM
Ms. Gerwitz summarized concerns with the school trust lands: the land has limited resources to manage the asset; the land is scattered around the state in small parcels; the State Land Board is constrained by state budget and procurement regulations; and the fact that lease revenues are subject to the Taxpayer's Bill of Rights (TABOR). She also summarized more specific descriptions of what Utah has done to promote success in this area. Ms. Suckla responded to questions regarding the process followed by the Steering Committee. She discussed issues regarding designating representatives of beneficiaries, as some states have done.
08:23 AM
Ms. Gerwitz described what has happened in California as a result of the sale of most of their trust land a century ago. She completed her presentation by discussing the immediate recommendations for a 2005 legislative agenda and encouraged the members to seek more information on the issue. Committee members made final comments on the issue. Ms. Suckla made final comments about the efforts of the Steering Committee.
08:30 AM
The committee adjourned.