Isabella Carter
The Texas Constitution of 1876 established a permanent fund to support public schools in the state. The fund, known as the Permanent School Fund (PSF), was created with the aim of providing a perpetual source of funding for education. The constitution stipulated that certain lands and proceeds from the sale or lease of these lands would be allocated to the PSF. The management of the fund and its distribution to schools were outlined, with specific provisions for the investment of proceeds and the role of the State Board of Education. The constitution also addressed the establishment of separate schools for white and coloured children, with impartial provision for both.
| Characteristics | Values |
|---|---|
| Date | February 15, 1876 |
| Amendment Dates | Aug. 14, 1883, Nov. 5, 1985, Nov. 7, 1995, Nov. 8, 1988, Nov. 7, 1989, Nov. 8, 1983, Aug. 11, 1891, Nov. 3, 1964, Sept. 1, 2005 |
| Article | VII: Education--The Public Free Schools |
| Sections | 2, 3, 4, 5, 6a, 6b, 7, 8, 9 |
| Content | The constitution of 1876 requires funding for schools. It establishes a perpetual public school fund, consisting of all funds, lands, and other property set aside for public schools. It also sets aside a portion of the state's general revenue and poll tax for the benefit of public free schools. |
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What You'll Learn
The Permanent School Fund
The PSF's purpose is to assist public education by providing money from a source other than taxes, thus easing the tax burden of the state's citizens. The Texas Constitution states that the money from the fund is to be distributed to the state's school districts based on average daily attendance per district. The fund's predecessor was the Special School Fund, established by the School Law of 1854. The Special School Fund was created with $2 million in United States treasury bonds left over from a $10 million settlement given to Texas by the United States government.
The PSF's administrative framework has changed since 1876, but its purpose has remained the same. Before the 20th century, school-land sales and leases produced the revenue added to the fund. More recently, fuel taxes and leases of off-shore oil lands have generated revenue for the PSF. The amount of interest drawn from the fund and paid into the Available School Fund rose from just under $100 million or $40.60 per student expenditure in 1978 to more than $550 million or $117.42 per student expenditure nine years later. By 1989, through taxes, land sales, land leases, and investments, the PSF had grown to more than $8 billion. As of August 31, 2024, the fund balance was $10 billion.
The State Board of Education has constitutional authority to invest PSF assets and make annual distributions to public schools. The fund's investments are restricted to specific types of bonds, and the fund's use is restricted to disbursement of interest only. The General Land Office and School Land Board manage PSF lands, including the leasing of surface and mineral rights. The proceeds from these lands, particularly oil and natural gas royalty revenue, formed the historical corpus of the PSF.
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Funding sources
The Texas Constitution of 1876 established funding sources for public schools. The Permanent School Fund (PSF) was created as a perpetual fund to support Texas public schools, and it included certain lands and all proceeds from the sale or lease of these lands. The constitution stipulated that the General Land Office would manage the PSF lands, while the School Land Board would oversee them. The proceeds from these lands, particularly oil and natural gas royalty revenue, formed the historical corpus of the PSF.
The constitution also set aside funds, lands, and other property appropriated for the support of public schools. This included one-half of the state's public domain and sums from the sale of any portion of it, as well as a poll tax of one dollar on male inhabitants between 21 and 60 years of age. Additionally, the legislature was to set apart annually not more than one-fourth of the state's general revenue for the benefit of public free schools.
The constitution further established that the governor, comptroller, and secretary of state would constitute a Board of Education responsible for distributing funds to the counties and performing other duties concerning public schools as prescribed by law. The Board of Education was also given the authority to manage the assets of the permanent school fund, including acquiring, exchanging, selling, supervising, managing, or retaining investments.
Furthermore, the constitution addressed the funding of "The University of Texas." It stated that all lands and other property appropriated for the establishment and maintenance of the university, along with all proceeds from sales and grants, donations, and appropriations, would constitute a permanent university fund. This fund was to be invested in lands of the State of Texas or, if not possible, in United States bonds, with the interest accruing subject to appropriation by the Legislature.
In addition to these funding sources, the constitution also allowed for the sale of permanent school fund lands, with the proceeds used to acquire other land for the fund or invested in various types of bonds. The constitution also provided for the taxation of agriculture or grazing school land owned by any county, with certain exceptions.
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School Board responsibilities
The Constitution of Texas, 1876, established a permanent fund for free public schools, with certain lands and all proceeds from the sale or lease of these lands comprising the fund. The School Board is responsible for overseeing the management of the district or charter school and ensuring that the superintendent implements and monitors district operations.
School board members are responsible for the success or failure of local public education and all the activities in which their students participate. They are responsible for hiring and evaluating the superintendent of schools, but they allow the superintendent and the administration to run the day-to-day operations of the school district.
School boards are responsible for developing the annual budget to run the school system and setting school policies. They are also responsible for setting the tax rate for the school district that will then fund the operations of that district. School boards are inextricably linked with their local communities, and it is crucial for them to partner with other elected officials, local employers, colleges, and nonprofits.
School board members are unpaid volunteers who attend meetings, participate in continuing education training and professional development, research district policy and data, and represent the community at events. They are responsible for adopting shared visions and goals for the district, creating and monitoring systems and processes, and ensuring progress and accountability. They are guardians and stewards of the public trust, putting the interests of their local community's youth first.
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School fund investment
The Texas Constitution of 1876 established a fund to support public schools, known as the Permanent School Fund (PSF). The fund was created to ensure that certain lands and all proceeds from the sale or lease of these lands would be used to support public education. The PSF was originally established by the Texas Constitution in 1845 as a perpetual fund for free public schools, and it was further strengthened by the 1876 Constitution.
The PSF is managed by the General Land Office and overseen by the School Land Board (SLB). The fund's assets include lands, leasing of surface and mineral rights, and royalty revenues, particularly from oil and natural gas. The State Board of Education (SBOE) is authorised to invest the proceeds of the PSF and make annual distributions to public schools.
The Texas Constitution outlines specific guidelines for the investment of PSF proceeds. The comptroller is responsible for investing the proceeds from land sales, as directed by the Board of Education. The investments are primarily made in the bonds of the State of Texas, or if unavailable, in United States bonds. The principal arising from these investments forms the permanent school fund, while the interest and taxes accrued constitute the available school fund.
The available school fund is used annually to support public free schools, and no law can appropriate these funds for any other purpose. The Board of Education distributes the funds to the various counties and ensures that separate schools are provided for white and coloured children, with impartial provision for both.
In addition to the PSF, the Texas Constitution of 1876 also addresses the establishment and maintenance of "The University of Texas." It stipulates that all lands, property, and proceeds related to the university shall constitute a permanent university fund. This fund is to be invested in lands of the State of Texas or, if unavailable, in United States bonds, with the interest subject to appropriation by the Legislature.
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School fund distribution
The Texas Constitution of 1876 established a fund for free public schools, known as the Permanent School Fund (PSF). The fund was created to ensure that Texas public schools would be supported by a perpetual fund. The PSF was originally established by the Texas Constitution in 1845 with a $2 million investment from the state.
The 1876 Constitution stipulated that the PSF would be comprised of certain lands and all proceeds from the sale or lease of these lands. This included all funds, lands, and other property previously set aside for the support of public schools, as well as alternate sections of land granted to railroads or other corporations by the state. The constitution also set aside one-fourth of the state's general revenue and a poll tax of one dollar for males between 21 and 60 years old to benefit public free schools.
The governor, comptroller, and secretary of state constituted a Board of Education responsible for distributing funds to the counties. The Board of Education was also tasked with investing the proceeds from land sales in state or US bonds, with the interest accruing being subject to appropriation by the Legislature for the benefit of public schools.
The PSF has continued to grow and evolve since its establishment. In the mid-20th century, the US Supreme Court ruled that Texas owned the seabed extending 10.35 miles from its coastline, and these lands and the associated royalty revenue were added to the PSF. Since 1929, the Texas Constitution has authorized the State Board of Education to invest PSF assets and make annual distributions to public schools. Today, the PSF is the largest educational endowment in the United States, with a value of over $42 billion.
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Frequently asked questions
Yes, the Texas Constitution of 1876 established a permanent fund for free public schools. The fund was created from certain lands and all proceeds from the sale or lease of these lands.
The funding for the Texas Constitution of 1876's requirement for school funding came from a variety of sources, including:
- Lands appropriated for public schools
- Revenue derived from land and other properties
- Taxes authorized by the constitution or general law
- Appropriations made by the legislature
The funding for schools is distributed by the State Board of Education, which has the authority to invest the proceeds and make annual distributions to public schools. The Board of Education is also responsible for supervising the Public Free Schools of the State and performing other duties related to public instruction as directed by the Legislature.
Yes, the Texas Constitution of 1876 stipulates that the funding for schools can only be used for the support, maintenance, and improvement of educational institutions. Additionally, the constitution prohibits the enactment of any law that appropriates the permanent or available school fund for any other purpose.
