Land Board denies Luna’s request for more money
BOISE – Members of Idaho’s Land Board wouldn’t budge Tuesday when asked by the state schools chief to increase funding for schools next year.
Superintendent of Public Instruction Tom Luna, who’s also a member of the Land Board, argued that Idaho’s schools are hurting from budget cuts. What’s more, he told the board, costs are rising due to a growing student population and looming school reform proposals, but the payout from the state’s permanent endowment hasn’t risen in four years.
The Land Board, which is chaired by Gov. Butch Otter, oversees the endowment. Board members voted 4-1 to keep the payout frozen at $31.3 million; Luna had sought $37 million.
Endowment fund officials say the fund is still well below the recommended reserve level of five years worth of payments. Three years ago, Luna persuaded the Land Board to make an extra $22 million payout to schools, which further cut into reserves; the reserves are now at less than four years worth of payments.
“As state superintendent but also as a land commissioner, I consider … all sources of revenue as we try to figure out the best scenario in order for our schools to be successful,” Luna said.
Larry Johnson, investment manager for the Endowment Fund Investment Board, presented a detailed analysis of Luna’s proposal and said the endowment board still recommends sticking with the original figure. The endowment board makes distribution recommendations based on the financial condition of the fund, he said – not on the beneficiaries’ requests.
Luna offered a compromise proposal to boost the payment to $34 million, saying that way, the reserve fund wouldn’t fall. “I’m not asking that we reduce the amount of the reserve funds in order to increase distributions,” he said. “I’m making the case that we can do both, and we need to do both.”
Idaho Secretary of State Ben Ysursa said, “The more you take out of the reserves, the less you build up over the years, period. That’s where I’m coming from.”
Otter seconded Luna’s motion “out of respect” so it didn’t die for lack of a second, but he voted against it.
“I can’t discuss this in a vacuum, without considering our goal and … our confidence in sort of our safety level, and that’s at five years,” Otter said. “So as quick as I can get that to five years, then I can be a lot more generous.”
The board approved a proposal from Attorney General Lawrence Wasden calling on the investment board to complete a review of its investment and distribution strategy for the endowments, including the five-year target for the reserves. The review would also look into the lands portion of the state endowment, including strategies such as moving into commercial property investments in addition to the traditional timber and grazing land.