From the time of statehood, the Common School Fund has provided revenue to support Oregon’s public schools. The fund receives income from state-owned assets including forestland and waterways and also benefits from investment returns. Unclaimed property is held in the Common School Fund until claimed by the rightful owners.Historically, about 4 percent of the fund has been sent to school districts annually, which has been deemed a sustainable rate of disbursements. To help balance the current state budget, the 2013 Legislature requested an extra 1 percent withdrawal from the Fund, which was the $12 million approved today by the Land Board.
The $12 million will be disbursed across the biennium, in four equal $3 million payments in 2014 and 2015.
The Land Board is made up of the Governor, Secretary of State and the State Treasurer. The members agreed that future distributions from the fund should remain at the long-term sustainable rate of 4 percent.
The Oregon Investment Council, which includes the Treasurer, guides the investment of the Fund. Only the earnings are sent to schools.
“Oregon schools are working hard to educate our next generation, and we are pleased to support the Legislature’s commitment to education,” Treasurer Wheeler said. “At the same time, we must continue to be wise stewards of the Common School Fund, to ensure future generations will also benefit.”
Because of strong recent investment performance, the Fund has recovered from the 2008-09 worldwide economic crash, which caused the value to plummet to less than $700 million. The fund is now valued at $1.2 billion.
However, the long-term projected returns for the Fund are uncertain to fare as well, in large part because of poor revenues from state school forestlands, such as the Elliott State Forest, which covers 85,000 acres near Reedsport.
While the Constitution calls for the Land Board to maximize returns from common school holdings to benefit public education, the net revenue from the Elliott State Forest has not achieved the levels anticipated under the 2012 Elliott Forest Management Plan. In other words, while invested funds have generated relatively strong gains, the Fund’s forestland holdings have produced significantly less well.
The Land Board is discussing potential steps, such as the potential of selling expensive-to-manage parcels and then investing the proceeds.
Administration of state-owned lands and staffing of the Land Board are the responsibility of the Oregon Department of State Lands.
The Oregon State Treasury protects public assets and saves Oregonians money through its investment, banking, and debt management functions. State investment policies are overseen by the Oregon Investment Council. The State Treasury also promotes public outreach and education to help Oregonians learn strategies to save money, invest for college and make smart financial choices. You can track Treasury-related news on Twitter at @OregonTreasury.
Recent distributions from the Common School Fund:
2000 – $35.2 million
2001 – $40.8 million
2002 – $15.7 million
2003 – $32.2 million*
2004 – $13.3 million
2005 – $40.2 million
2006 – $45.4 million
2007 – $48.5 million
2008 – $55.4 million
2009 – $40.4 million
2010 – $50.5 million
2011 – $48.8 million
2012 – $48.0 million
2013 – $53.1 million **
* Includes a special distribution of $17.7 (requested during a special legislative session).
** Made up of distributions of $26.5 million in January 2013 and $26.5 million in July 2013
