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Common School Fund
value as of June 30, 2007: $1,169,000,000.
The act of Congress admitting Oregon to the Union in 1859 granted sections 16 and 36 in every township "for the use of schools." The provision of land for educational purposes was a practical solution for the developing nation that was "land rich, but cash poor."
In Oregon, Congress granted roughly six percent of the new state´s land-nearly 3.4 million acres-for the support of schools. Due to various circumstances, only 773,000 acres remain in state ownership today.
These lands and their mineral and timber resources, as well as other resources under the State Land Board´s jurisdiction (including the submerged and submersible lands underlying the state´s tidal and navigable waterways) are managed "with the object of obtaining the greatest benefit for the people of this state, consistent with the conservation of this resource under sound techniques of land management."
- Rangelands are leased to ranchers for grazing sheep and cattle.
- Forestlands are managed for timber production.
- Waterways are leased for uses such as sand and gravel extraction, houseboats, marinas and log rafts. The rents and royalties received from these activities are deposited in the Common School Fund, a trust fund for the benefit of Oregon´s K-12 public schools.
Other sources of money contributing to the Common School Fund include:
- Escheats -- property reverting to the state on an individual´s death because no heir or will exists or can be found;
- Unclaimed property, while the agency searches for the rightful owner;
- Gifts to the state not designated for some other purpose;
- Tax revenues from the production, storage, use, sale or distribution of oil and natural gas; and
- 5% of the proceeds from the sale of federal lands.
The State Treasurer and the Oregon Investment Council invest the Common School Fund. In recent years, fund values have ranged from $600 million-$1 billion, depending on market conditions.
In addition, the Land Board must consider the issue of "intergenerational equity" in its distribution policies. Fund distributions cannot benefit current students at the disadvantage of future students, or vice-versa.
In early 2005, the State Land Board announced a record $45.6 million distribution of earnings from the Common School Fund to all K-12 public schools and voted to modify the future distribution policy for the fund. The turnaround in the stock market during 2004 created a significant increase in the value of the Common School Fund which reached $1 billion in February 2006.
Changes to Oregon law and the investment policies of the State Land Board beginning in the late 1980s significantly boosted earnings flowing to schools.
A 1988 Constitutional Amendment allowed investment of the Common School Fund in the stock market, subject to a legislatively-established investment cap of 50 percent. The 1997 Legislature increased the cap to 65 percent. That timely shift in strategy has nearly quadrupled the fund value due to growth of the stock market and revenues generated from land management.
In October 1999, the Land Board adopted a revised investment earning distribution policy with long-term growth and not a specific budget target as the objective. The policy establishes a sliding scale for annual distributions between two percent and five percent of the Common School Fund market value as of December 31 each year, depending on increases or decreases in the value of the fund. To prevent large variations in distributions from year to year, in 2005 the board voted to switch to a three-year rolling average for calculating the fund's value change after January 1, 2006.
Since 1982, the Common School Fund has sent nearly $400 million to Oregon public schools.
Legislation passed in 2005 directed the Oregon Department of Education to send CSF revenues directly to Oregon's 198 K-12 public school districts. Previously, the State Land Board sent the funds to Oregon's 36 counties who then distributed the monies to schools.
Recent distributions:
During the past five fiscal years, distributions have fluctuated as the change in CSF value has risen and fallen with the stock market:
2000 - $35.2 million
2001 - $40.8 million
2002 - $15.7 million
2003 - $32.3 million*
2004 - $13.3 million
2005 - $40.2 million
2006 - $45.4 million
2007 - $48.5 million
* Includes a special distribution of $17.7 million comprised of the entire statutory portion of the corpus of the CSF accumulated over 50 years (requested during a special legislative session).
 Fund Diagram  shows actual revenues and expenses related to the Common School Fund for
 the 2003-2005 two-year budget period.
Fact sheet tells about sources of CSF revenue and the restrictions on use or borrowing these
specific funds.
CSF Brochure
8/28/06
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