Treasurer says holding cash beats small bond buy‑downs; committee considers one‑time uses of $14.19M reversion

Treasurer Mike Pichak told the Joint Fiscal Committee on Jan. 30 that the state has delayed spending a $20 million appropriation intended to buy down outstanding state bonds because, in the current interest‑rate environment, holding cash yields more benefit than executing the buy‑downs now.

"If you took $1,000,000 and bought down the bonds, $1,000,000 worth of bonds, we would save about $47,000 in interest over the life of that bond," Pichak said. "Each year that we've held that million dollars since it's been appropriated to us ... we are earning about $40,000 on that cash. So $50,000 a year on that $1,000,000." Pichak said those returns, and opportunities to refinance larger issues, have led the treasurer's office to defer applying the full $20 million to bond principal.

The treasurer's office told the committee it manages about $600 million in outstanding state bonds and continues to look for refunding and refinancing opportunities that can produce net savings…