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Question of money

Published April 3, 2013 3:00 pm

Taking politics out of school trust
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Whenever elected officials see a large sum of money that seems to be idle, it's certain that at least some of them will try to find a way to use it for something they deem critical. That's the problem with Social Security: Past Congresses "borrowed" money from the Social Security Trust Fund to pay for all kinds of budget items, and now that it's time to pay the debt, the federal government hasn't got the money.

A panel under the guidance of a member of the State Board of Education is considering how Utah can prevent something similar from happening to the state's education trust fund. It's a valid concern that deserves thorough research by the new School Trust Investment Task Force.

But the most pressing issue is whether the fund is growing as much as possible.

A fiscal analyst for the State Office of Education says a group of professional investment counselors might be better able than the elected state treasurer to get the best return on investments from the trust fund.

Although Utah now has a highly qualified and experienced treasurer who is successfully handling the $1.4 billion school trust fund, future elections could change all that. The only qualifications for candidates for the office of treasurer is that they are at least 25 years old, a registered voter and a resident of Utah.

Considering Utah voters' history of electing Republicans no matter their qualifications — the current state attorney general is a case in point — protecting the trust fund from political influence as much as possible could be the best policy.

Oil and gas production and other commercial enterprises on the 3.4 million acres of state trust lands are managed by the School and Institutional Trust Lands Administration. Money from use of the land goes into the Education Trust Fund, which has produced an average return of 5.75 percent over the past 10 years under direction of the treasurer. Under the Utah Constitution, the fund's gains are re-invested while dividends and interest are distributed to Utah schools. The principal cannot be touched.

While some legislators have inquired about taking money from the fund for projects unrelated to education, it seems unlikely that could happen without amending the Constitution.

About 1 percent of the budget for public education comes from the trust fund. Whether that amount could be increased if the fund were managed by professionals rather than the treasurer is the question the task force must answer.




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