Oklahoma
(as of June 2024)
On May 20, 1785, the Continental Congress provided land to support schools as each new state joined the union. “There shall be reserved the lot No.16, of every township, for the maintenance of public schools within the said township.” Over 134 million acres were subsequently granted in trust as a condition of statehood. Today over 45 million acres continue to be held in trust by 20 states for the support of public schools. Revenue is placed in permanent school funds, now over $115 billion, and over $5 billion was distributed to western schools in FY 2024. However, few educators or members of the public know about school trust lands. Advocates for School Trust Lands is sharing this grand history of America’s founding vision for schools, hoping that over time Americans will know of school trust lands and their support for public schools.
In 1890. prior to statehood, 2 million acres of school lands were granted by Congress to Oklahoma to support common schools. The granted lands are part of a “sacred trust” between Oklahoma and Congress, requiring the state to act with undivided loyalty to schools as it manages the lands and trust fund created from the lands. Oklahoma received Sections 16 and 36 but received no school land within established Indian designations. Of the original grant, 726,000 surface acres and 1.1 million mineral acres remain.
To compensate for lower acreage for schools, Congress paid $50 million to Oklahoma’s Common School Permanent Fund. Both lands and funds are managed by the Commissioners of the Land Office (CLO) composed of the top five statewide elected officials: Governor, Lieutenant Governor, State Auditor and Inspector, State Superintendent of Public Instruction, and Secretary of Agriculture. The Governor is the Chair of the Oklahoma Land Board and appoints the Secretary to administer the trust. Secretary Dan Whitmarsh currently serves as the chief administrator of the trust.
The minerals section manages 1.1 million mineral acres for all beneficiaries. The school mineral rights are located in almost all of the 77 counties in the state. There are 4,500 active oil and gas leases and an additional 100,000 mineral acres are managed for several state agencies. To maximize revenue, a precise inventory of what is owned, leased and available is maintained. Oil and gas lease sale auctions are conducted quarterly on-line. Only bids that meet or exceed fair market value are considered. Since 2007, the oil and gas lease auctions have yielded over $300 million in bonus revenue distributed directly to the beneficiaries. Mineral bonus revenue is significant to Oklahoma schools.
Oklahoma is at the intersection of three major interstate highways and has always ranked high in various economic indices like jobs, friendly to business, quality of life, and demographics. With 726,000 acres owned since statehood, the land office offers many locations for commercial and industrial developments and short and long term commercial leases.
Each October, approximately one-fifth of state school land is leased at public auction for agricultural farming and grazing, as well as for outdoor sport and recreational use. Revenues received from these auctions support Oklahoma schools and colleges. Tracts which go unleased at public auction are offered on a first come, first served basis through the end of the year. Remaining unleased tracts are offered through a sealed bid auction the following year.
All income from land sales, mineral royalty from production, and investment gains are invested in the Common School Permanent Fund. All other income including surface rent, mineral lease bonuses, delay rentals, dividends, and interest, less the expenses to manage the lands and invest the permanent fund, are distributed to school districts monthly. The annual records of the distributions by school district are available at www.clo.ok.gov/resources/records-reports.
The market value of the FY 2024 Common School Permanent Fund is $2,575,745 with a 5-year total weighted return of 4.12%. Oklahoma no longer invests all revenue in their Common School Permanent fund invested most revenue sources in their Common School Permanent Fund. In the past, Oklahoma put all bonus revenue in their fund. The Oklahoma school fund has not risen like neighboring Texas, New Mexico, Wyoming, Arizona and Utah who invest all revenue providing greater revenue long-term to schools.
Revenue from the trust is part of the general revenue provided by the State of Oklahoma to public schools. Each state uses trust distributions differently. Wisconsin funds school libraries, Washington and Colorado build schools in rural parts of the state, Arizona funds classroom needs, Minnesota and Oklahoma provide additional revenue directly to each district, and Utah allows parents, teachers and the principal in every school to develop academic programs to improve student performance.
