BOISE - Idaho’s state Land Board voted 4-1 this morning to distribute $47.5 million next year to state endowment beneficiaries, which include public schools. That’s up 2.3 percent overall from this year’s distribution of $46.43 million.
But the allocation includes no actual increase for schools, which would get $31.29 million, the same as this year.
State schools Superintendent Tom Luna cast the lone dissenting vote, prompting a questioning look from Gov. Butch Otter, who chaired the meeting, as he hadn’t spoken against the motion from Attorney General Lawrence Wasden to approve the endowment board’s recommendation.
“I chose not to rehash my concerns I’ve expressed before at this time,” Luna said, “seeing it wasn’t going to change any votes.” Otter responded, “You’re probably right.”
Luna successfully advocated an additional $22 million payment from the endowment to schools the year before last to help ease them through state budget cuts, but the board agreed to that only on a one-time basis.
The endowment board’s recommendation is based on the state’s management formula for the fund, that 5 percent of the permanent balance be distributed to the beneficiaries each year; the largest beneficiary is public schools, while others include the University of Idaho, State Hospital South, the state penitentiary, and other state institutions.
That formula would actually result in a small reduction for schools and one other beneficiary next year, but endowment fund investments manager Larry Johnson said there are sufficient reserves to make sticking with the 5 percent level “prudent.”
Some of the other endowments have actually exceeded their targets for reserves; in accordance with the state’s policy, $28.6 million from those funds’ reserves will be transferred into their permanent funds. There’s no transfer back for public schools, which now has enough reserves to cover three years of distributions, below the target of five years; all other endowments have five years’ worth of reserves.
“The recommended distributions and transfers are prudent and achievable, and … they represent an appropriate balance between current beneficiaries and future generations,” Johnson told the Land Board.
The distribution level approved by the Land Board today will now be built into budget requests for 2013 that lawmakers will consider in January.