Staff brief committee on state benefits, PERSI employer costs and treasurer—s investment pools; treasurer reports about $249 million earned from cash management

Legislative staff presented two related briefings: Frances Lippitt of the Legislative Services Office summarized how employee benefits are budgeted, and Christopher Lahoset summarized investment and cash‑management programs run by the State Treasurer—s Office.

Why it matters: benefits and earned interest materially affect agency budgets. Health insurance, retirement and other variable benefits can add roughly 23–26% on top of salary costs and interest earnings on state cash affect available resources and the timing of borrowing.

Health, pension and benefits overview: Frances Lippitt told the committee that benefits accounted for about 26.6% of personnel cost expenditures in FY2024 and that health insurance is the largest single component of benefits. Lippitt explained the state budgets health insurance as a per‑full‑time‑position (FTP) appropriation. Using staff calculations, a prudent appropriation target would be $13,960 per FTP for FY2026 based on a 10% reserve requirement; the governor—s recommendation sets the appropriation at about $14,300 per FTP to cover plan costs at a higher confidence level (staff said this higher per‑FTP level would cost about $56.6 million across the budget).

Lippitt also summarized employer retirement (PERSI) contribution rates in current law: roughly 11.96% for general members, 14.65% for public safety employees and 13.47% for teachers — employer PERSI contributions totaled about $141.5 million in FY2024, she said. Lippitt described other variable benefits (Social Security/Medicare employer share, life insurance, workers— compensation) and explained how variable benefits are typically budgeted as a percentage of salary.

Treasurer—s investment programs and interest: Christopher Lahoset described four state programs the Treasurer manages for cash and investments:

- Local Government Investment Pool (LGIP): pools short‑term cash from cities, counties, school districts and other local entities to earn higher returns while maintaining liquidity; investments are short‑term, high‑quality instruments.

- Diversified Bond Fund (DBF): a longer‑horizon fund for state and public agencies (typical horizon ~3.5+ years). The DBF benchmarks to a blended index, charges an annual fee of 0.017% deducted monthly, and has a $250,000 minimum initial investment.

- Idle Pool (Idaho pool): the treasurer—s daily cash management vehicle; staff invest surplus daily cash into short‑term instruments and reported the pool earned over $249 million in interest in fiscal year 2024 (treasurer staff note this amount reflects interest earned across many funds and allocations).

- Millennium Permanent Endowment Fund (MPEF): a long‑term fund for Master Settlement Agreement proceeds (tobacco settlement) designed to preserve principal and generate income for tobacco prevention, public health campaigns and related programs.

Members asked how interest earnings are directed. Lahoset and LSO staff said the destination for earned interest is determined by statute for each fund; some interest is credited back to the fund that generated it, some is codified to flow to other accounts. Representative Tanner asked whether interest earnings could be routed back through the Legislature for appropriation; Lahoset replied that statute currently directs where interest is recorded, and changing that routing would require legislative action across multiple code sections because many funds are affected.

Ending: staff said detailed reports showing interest earnings by fund and agency would be posted to the committee SharePoint. Members thanked staff and noted the material will be useful as the committee considers use of one‑time cash, continuous appropriations and the interaction between interest earnings and tax‑anticipation borrowing.