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Treasurers office details four investment pools; FY2024 idle-pool interest totaled about $249 million
Summary
The state treasurers office presented an overview of its investment programs: the Local Government Investment Pool, Diversified Bond Fund, Idle Pool and the Millennium Permanent Endowment Fund. Staff noted the idle pool earned about $249 million in FY2024 and that interest distribution rules are set in statute.
Christopher Lahoset, budget and policy analyst, Legislative Services Office, summarized the investment programs managed by the State Treasurer's Office and how interest earnings are reported to the legislature.
Programs described: Lahoset outlined four programs: - Local Government Investment Pool (LGIP): a short-term, low-risk pooled vehicle for local governments to earn interest on idle funds (governed by Idaho Code 67-1226). - Diversified Bond Fund (DBF): a longer-horizon pooled bond vehicle suitable for public agencies with a typical horizon of 3.5 years or more; the DBF benchmarks to a blended Bank of America Merrill Lynch index and carries a small annual fee (presentation said $250,000 minimum participation). - Idle Pool: the states cash-management pool used to manage daily cash flow for state operations, with short-term investments and some long-term allocations; Lahoset said the idle pool earned over $249 million in interest in FY2024. - Millennium Permanent Endowment Fund (MPEF): long-term endowment established from the tobacco Master Settlement Agreement to fund prevention and public-health programs.
Interest distribution and reporting: committee members asked whether interest earnings always flow back through the general-fund appropriation process. Lahoset said the destination of interest earnings is governed by statute: some fundsinterest is credited back to the same dedicated fund, while other earnings are distributed by code to the general fund or particular accounts. He said staff have posted reports to SharePoint showing interest earnings by fund and will provide additional detail on the direction of those earnings.
Why it matters: earnings from pooled investments and interest on idle balances can materially affect fund balances available for appropriation and for program activity. Representative Tanner and others asked whether interest that bypasses the general fund should be routed back through the legislative appropriations process; Lahoset said statutory changes would be required to alter where interest is credited.
Ending: staff said supporting reports are posted to committee SharePoint and that the treasurer's office will provide follow-up as requested; no legislative action was taken during the presentation.
