16th Section: Don’t eat the seed corn
Secretary of State Delbert Hosemann is exactly right in warning the Mississippi Legislature against allowing school districts to dip into 16th Section principal funds to deal with present financial problems.
To do so would be like a poor farmer eating his seed corn, and as Hosemann says, it would mortgage education for our grandchildren.
Already school districts can spend interest on 16th Section principal accounts on their operating budgets, as well revenue from renewable resources, such as lease payments and timber sales.
They cannot spend oil royalty money on operating expenses, since that is considered a non-renewable resource which must go into the principal account.
However, school districts can borrow from the principal account for capital expenditures such as buildings and school buses at 4 percent interest. The interest, though, is paid to the school district’s 16th Section fund, which, in effect, means the money is borrowed interest-free.
