The University of Texas has several icons that endure. From the animal kingdom, there’s Bevo. From the coaching kingdom, there’s Darrell Royal. Among athletes, there’s Earl Campbell. But when it comes to money, the icon that reigns supreme on the Forty Acres is Santa Rita No. 1.
Until that famous oil well erupted with black gold, UT was just another impoverished land-grant university. That all changed 77 years ago, when oil started flowing from the well on dusty university-owned land near the town of Big Lake in Reagan County. Today, UT’s oil-producing lands are starting to run dry. But the oil wealth they produced continues to provide billions of dollars’ worth of support to students in Texas. And some of those same university lands could begin paying dividends for Texas recreation users.
A recent Sunset Commission report suggested that some of those properties could be used by the public for hunting and other uses. Although legislators will have to debate various plans on opening up state land to mountain bikers, birdwatchers, and others, it’s worth remembering how and why the state set aside the lands in the first place.
It was 1839, just three years after the Battle of San Jacinto, when Mirabeau B. Lamar, the Georgia aristocrat and second president of the Republic of Texas, proposed a network of state lands to support education. Lamar’s proposal evolved into the Permanent School Fund and the Permanent University Fund, which today control 15.4 million acres of state-owned property and billions of dollars in investment accounts.
The Permanent School Fund is the largest holder of public lands, controlling over 13.3 million acres, or about 64% of all state-owned land. The University Fund, though smaller, is also significant — it controls 2.1 million acres in 24 counties, most of it in rural West Texas.
According to the state constitution, profits from the PUF are divided, with two-thirds going to UT and one-third to Texas A&M. In August of 1998, the Permanent Fund had a total market value of $7 billion. Income derived from the fund that year included $54.3 million from gas and oil royalties, $10 million from surface leases, and $1.1 billion from investments. Second in size only to the endowments of Harvard University, the PUF serves more than 148,000 students on 17 campuses. (Six other state campuses, including UT-Brownsville and UT-Pan American, receive capital support from the Higher Education Fund established in 1984.)
University of Texas System spokesperson Monty Jones says that although the Sunset Commission report may provide some ideas about other uses for the school lands, the UT system believes it “is making good use of the land already,” adding that UT officials have “an obligation to get the best return on the property as possible.”
There’s little doubt that UT will want to continue maximizing its returns on its property. But Santa Rita’s days as an icon are numbered. And as the amount of oil income from state school lands continues to fall, it may be time to consider new uses for the property that Mirabeau Lamar so cleverly set aside 161 years ago.
This article appears in May 19 • 2000.