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Treasurer’s office briefs JFAC on investment pools and reported $249 million interest earnings in FY2024
Summary
Legislative staff and the state treasurer’s analyst described four state investment programs (LGIP, Diversified Bond Fund, idle pool and the Millennium Permanent Endowment Fund), explained statutory direction of interest earnings, and reported the state pool had earned more than $249 million in interest in fiscal 2024.
Christopher Lahoset, a budget and policy analyst with the Legislative Services Office, briefed the Joint Finance‑Appropriations Committee on the treasurer’s office investment programs and the way interest is reported and distributed.
Lahoset described four main programs overseen by the treasurer’s office: the Local Government Investment Pool (LGIP) for shorter‑term local government cash, the Diversified Bond Fund (DBF) for longer‑term agency investments, the state’s daily idle pool that manages treasury cash flow, and the Millennium Permanent Endowment Fund (MPEF) that invests Master Settlement Agreement tobacco dollars for long‑term public health programs.
He said the state’s idle pool earned over $249,000,000 in interest in fiscal 2024. Lahoset also told members that the direction of interest earnings (which fund receives interest) is determined by statute and that reports showing interest earnings by fund and agency are available (he said the committee’s SharePoint includes relevant reports).
Representative Tanner and other members asked whether interest that is earned by funds is routed through the legislature as appropriated revenue or directed by statute to specific funds. Lahoset said the statute determines the destination of interest earnings and that changes would require legislative action; he also said staff had posted a report to SharePoint listing interest earnings by fund and agency.
Key points
- LGIP: a short‑term, low‑risk pooled investment for cities, counties and school districts; invested in US Treasuries and similar instruments under Idaho code guidance.
- Diversified Bond Fund (DBF): intended for longer time horizons (about 3.5 years or more), requires a $250,000 minimum investment, benchmarked to a blended corporate/government and mortgage index, and carries slightly higher risk and fee (0.017% annual fee deducted monthly).
- Idle pool: manages the state’s daily cash flows; the treasurer’s office invests short‑term surpluses in instruments such as Treasury bills, CDs and repos at low risk; FY2024 interest earnings from the Idaho pool were reported at over $249 million.
- Millennium Permanent Endowment Fund (MPEF): invests tobacco MSA settlement proceeds for long‑term public health use; managed for principal preservation and income generation.
Why it matters: Committee members asked how interest earnings affect the general fund and appropriations. Lahoset said interest is tracked by fund and agency and directed by statute; if the legislature wanted different routing of interest the change would require statutory revision. Lahoset and committee members agreed staff would make interest‑by‑fund reports available for members’ review.
Ending
Lahoset closed by noting the treasurer’s office reports and the LSO spreadsheets will be posted on SharePoint; he said statutory direction determines how interest is allocated and that any change in that allocation would require legislative action.
