Texas students benefit from Permian Basin oil boom
Dallas Morning News Editorial:
If you think the West Texas oil boom is irrelevant to your life beyond lower prices at the gas pump, let us introduce you to a couple of endowment funds that have boomed, too: The Permanent University Fund and the Permanent Schools Fund.The anti-energy left which opposes the oil and gas business would do great harm to education funding in Texas and to the children who benefit from it. The fund should grow significantly in the next few years as infrastructure is put in place to get the oil and gas to market and to the Gulf Coast for export.
What many people may not realize is that Texas has a couple of endowments tied to oil and gas extraction that benefit its schools.
In the 1876 Texas Constitution, legislators showed unusual foresight by setting aside land in West Texas for each fund, stipulating that any sales or proceeds from the land should remain part of those funds. Little did they know the enormous underground riches of the Permian Basin.
“They expected that the land would be sold at some point and the proceeds of the sale invested to create an endowment. Striking oil changed everything, and that once-unpromising brush land has made the PUF and these two systems what they are today,” as former UT System Chancellor William McRaven said in testimony to a joint legislative committee in February.
The Permanent University Fund, PUF, is the principal endowment fund for the University of Texas and Texas A&M systems. Endowment assets for UT and A&M amounted to $32.9 billion in November, surpassing Yale University to become the second-largest university endowment in the country, just behind Harvard University, which has $39.2 billion. The size of the Texas endowment has expanded 20 percent over the past two years, and nearly doubled over the past decade, a time when new drilling techniques triggered an oil boom in West Texas and made the United States the world’s largest oil producing country.
The total assets of the Permanent Schools Fund, the PSF, an endowment for public K-12 schools, increased 14.7 percent in fiscal year 2017, thanks in part to a 27 percent increase in the value of the fund’s mineral interests.
This means that our state’s largest university systems and public schools have revenue streams that relieve the burden on taxpayers. Not entirely, of course. The PUF supports universities that educate around 376,000 students each year; Harvard has around 36,000 students. And anyone who pays property taxes can see that local schools rely heavily on local taxpayers and need better funding mechanisms from Austin.