Permanent School Fund Down $10 Billion
Vince Leibowitz | Oct 28, 2008 | Comments 0
The Permanent School fund has lost about $10 billion–yes, that’s “billion,” with a “b,” as a result of turmoil in the world’s financial markets, the Houston Chronicle reports.
That’s not good news for Texas education, by any means. First off, the Permanent School Fund generates investment income which is transferred to the Available School Fund, which is in turn used to directly finance public education in Texas. While the funding isn’t all (or even the lion’s share) of funding that goes to public education in Texas, it is still a lot.
Second, the Permanent School Fund guarantees bonds issued by local school districts to finance construction and other improvements. The problem here is two-fold. First, the PSF was already almost out of capacity to guarantee any additional bonds this summer. And, while the reason for that was merely waiting on the IRS to approve some legislation passed last year that raised the amount of bonds the PSF can guarantee, one must wonder exactly how much in bonded debt the fund can actually guarantee given it has lost $10 billion in value.
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Filed Under: Texas Education
