Montana School Trust Lands and Fund
On November 8, 1889, Montana joined the union, and Congress granted two sections per township for the support of public schools. Schools and other institutions received 6.2 million acres and now hold 5.2 million surface acres and 6.2 million mineral acres. These school trust lands are managed by the Montana Land Board who are the top five statewide elected officials: Governor, Attorney General, Secretary of State, Superintendent of Public Instruction, and Commissioner of Securities and Insurance. Shawn Thomas, Forestry and Trust Lands Administrator, is a classified State of Montana employee and manages the school lands within the Department of Natural Resources. The legislature approves the Division’s budget, but the expenses for managing Trust lands are paid from land revenue. The school lands are working lands, managed sustainably, to support Montana’s public educational institutions.
“Trust Lands provide much more than revenue. They provide wildlife habitat, hunting and recreation; they provide jobs, coal, forage, cultural resources, wheat, timber, barley, oil and gas—even dinosaurs. For the generations of farmers and ranchers who have leased them, Trust Lands provide for their families, and also provide a way of life.”
Gross Revenue from Montana Public School Trust Lands
During Fiscal Year 2022, the school trust lands generated $119 million in gross revenue. The largest revenue sources are minerals, agriculture, grazing, and timber revenue. All non-renewable revenue from oil, gas and minerals aresaved and invested in the Public School Trust Fund. Ninety-five percent of all land revenue plus 95% of all interest from the Public School Trust are distributed to schools. In addition, 5% of the land revenue plus 5% of the interest on the investments of the fund are returned to the Public School Trust.
The School Facility and Technology Account contains certain revenues from the sale of timber on Common Schools’ land, as defined in 20-9-516, MCA, revenues from activities on the Lands Acquired Trust, and Public Land Trust – Navigable Rivers. Trust lands generated $7,432,707 for the year, including revenue of $3,170,041 from the sale of timber on Common Schools’ land (in excess of 18 million board feet (MMBF)), $4,262,666 from hydro lease revenue on the Public Land Trust, and $25,741 from grazing lands, timber sales, commercial licenses and recreational use on the Lands Acquired Trust in the Potomac area.
Market Value of Montana School Trust Fund
The Public School Trust Fund is managed by the Montana Board of Investments. The market value of the Public School Trust Fund is $802 million as of June 30, 2022. The fund is invested to both generate revenue for current schools and to provide growth of the fund for future schools. The 5-year net total fund return was 9.7%.
The revenue to schools from the trust set up for them at statehood has varied significantly as a percentage of the overall state funding for schools. In one year, it was as high as one-quarter of all state funding due to mineral revenue that year.
Distributions to Montana Schools
Nonetheless, every year it is a dependable funding source and is felt in the impact it makes in each school’s funding. In FY 2022, $53 million was distributed to Montana’s K-12 schools.