Utah School Trust Lands & Funds
In 1894, due to the arid nature of Utah, Congress granted four sections per township for the support of public schools. Schools received 6 million acres and now hold approximately 3.4 million surface acres and 4.4 million mineral acres. These school trust lands are managed by the School and Institutional Trust Lands Administration (Trust Lands Administration) (website: trustlands.utah.gov). Michelle E. McConkie is the Director, and there is a seven person Board of Trustees chaired by Don Foot. The main office is located at 102 South 200 East, Suite 600 in Salt Lake City and is available by phone at 801-538-5100.
Gross Revenue from School Trust Lands
During Fiscal Year 2022, the school trust lands generated $136,908,156 in gross revenue. The largest revenue sources for fiscal year 2022 were real estate development activities, royalties from oil and gas production, land sales, and surface land leases.
The most significant accomplishments and challenges in the last two years include the continued strong growth of the agency’s real estate development program, with particularly strong revenue from developments in Washington County (St. George City and Washington City specifically). In addition, the agency benefitted from strong oil and gas commodity prices. There were also several large land sales in Fiscal Year 2022, including the sale of trust lands property for the new Utah State Raptor Park and the sale of the approximately 8,000 acre Cinnamon Creek parcel in Cache and Weber Counties for more than $20 million. The Trust Lands Administration also completed the large Utah Test and Training Range land exchange with the federal government, trading out lands used as part of a military bombing range for lands capable of generating revenue for the trust. The Trust Lands Administration is also in the process of implementing the Dingell Exchange with the federal government, trading out lands in Wilderness Study Areas for land with mineral, renewable and development potential. The Trust Lands Administration continues to struggle with the perception of its lands as public lands and associated degradation from recreational use.
All net revenue generated from the lands is placed in the permanent State School Fund, where it is prudently and profitably invested by the School and Institutional Trust Fund Office (SITFO) (website https://sitfo.utah.gov). The Director and Chief Investment Officer is Peter Madsen. The office is located at 310 South Main, Suite 1250, in Salt Lake City. There is a board of five investment professionals selected by a nominating committee and appointed by State Treasurer Marlo Oaks, who serves as Chair. The board hires and fires the chief executive officer.
Utah’s State Fund Growth
Wise and prudent investment along with profitable management of the school trust lands has led to rapid growth in the permanent State School Fund. The market value as of June 30, 2022, is $2.8 billion. The five-year time weighted return net of fees is 4.73%.
The asset allocation is as follows (detailed breakdown is available if requested below):
Growth 40.0%
Real Assets 18.6%
Income 27.2%
Defensive 14.1%
Utah’s Distributions to Schools from School Trust
Annually, revenue is distributed to schools based on a per pupil formula that provides additional funding for smaller rural districts. During FY 2022, $95,849,770 was sent to every public school in Utah through the School LAND Trust Program to be used for academic improvement based on a plan developed by elected parents, elected teachers, and the principal (website: schools.utah.gov/schoollandtrust). Distributions are made through the State Board of Education and are administered by Paula Plant who is the director. Local school boards are the gatekeepers and must approve each plan prior to implementation.