Common School Fund
This Fund is as old as Wisconsin. The framers of our state Constitution established this permanent “school fund” and required that its income be applied exclusively “to the support and maintenance of common [public K-12] schools … and the purchase of suitable libraries and apparatus therefor.”
Check out this YouTube video to get a closer look at what the Common School Fund does for Wisconsin.
The Fund was established with proceeds from the sale of the 16th Section of each township—nearly 1 million acres of land granted by the federal government to Wisconsin when it became a state. Except for the ~7,018 acres that remain in trust, all of the lands from these 16th section original grants were sold to establish the Fund. Like other states joining the union at that time, Wisconsin received another grant from Congress of 500,000 acres of land for the purpose of making “internal improvements.” Wisconsin’s early leaders petitioned Congress for permission to dedicate these lands for public education, as well.
The principal continues to grow, however, because the state’s constitution provides that the Fund receives clear proceeds of all fees, fines and forfeitures (including unclaimed and escheated property) that accrue to the state. What was for over 100 years a rich source of principal growth and public education support is being eroded as “clear proceeds” is redefined and governing bodies impose “surcharges” in lieu of fines. Today, the Common School Fund receives less than 10% of the revenue from a typical speeding ticket, for example.
The fund is now seeing additional growth from capital gains on some of its investments. The growth from fines, forfeitures, unclaimed property and capital gains have now pushed the total principal to over $1.4 billion!
The Fund is diversified across a number of different asset classes designed to produce a steady stream of distributable income as well as growth for the principal balance of the fund. The Fund has also invested hundreds of millions of dollars to direct loans to Wisconsin municipalities through the State Trust Fund Loan Program.
In April of each year, net earnings of the Fund are forwarded to the Department of Public Instruction for distribution to every Wisconsin school district as library aid. These monies are the sole source of state funding for public school
libraries and for many school districts is the only money available to them for
library books, newspapers and periodicals, web-based resources, and computer
hardware and software. Click here to see
how much your district received this year.
From the Department of Public Instruction, a complementary perspective on the Common School Fund, library aids, and the benefit to public education.