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Treasurer details investment pools; idle pool earned roughly $249 million in FY24 interest
Summary
The state treasurer’s office described four investment vehicles used by Idaho governments—the Local Government Investment Pool, the Diversified Bond Fund, the idle pool and the Millennium Permanent Endowment Fund—and staff agreed to post interest‑earnings detail requested by committee members.
The Idaho State Treasurer’s Office presented an overview of the state’s investment programs to the Joint Finance‑Appropriations Committee, describing four principal vehicles used to manage public cash and earn interest.
Christopher Lahoset, a budget and policy analyst with the Legislative Services Office summarizing the treasurer’s briefing, said the Local Government Investment Pool (LGIP) allows cities, counties and school districts to pool idle cash in short‑term, high‑quality securities to achieve better returns than they might obtain individually. The Diversified Bond Fund (DBF) offers a longer‑term option for agencies with three‑to‑five‑year horizons and invests in high‑quality bonds; Lahoset noted the DBF charges an annual fee and requires a $250,000 minimum investment.
The treasurer's idle pool, which manages the state’s day‑to‑day cash flow, invests leftover daily cash in short‑term instruments while preserving liquidity. Lahoset said the idle pool "earned over $249,000,000 in interest" in fiscal 2024. The Millennium Permanent Endowment Fund, he said, manages settlement dollars from the Master Settlement Agreement with tobacco companies and focuses on preserving principal while funding tobacco‑prevention programs.
Why it matters: several legislators asked how interest earnings are directed and whether interest from various funds is returned to the general fund or retained by the specific dedicated fund. Lahoset said the destination of interest earnings is set by statute and that staff have posted and will post to SharePoint reports breaking down interest earned by fund and agency. Representative Tanner requested the statutory mapping and a report that shows which interest flows bypass the general fund and where earnings are credited directly to specific funds.
Lahoset said interest direction varies by fund and could require multiple statutory changes if the legislature sought to change destination rules because numerous dedicated funds and federal funds have specified interest treatment. Staff committed to providing the committee a more detailed report on interest earnings by fund, and the treasurer's office materials were added to the SharePoint packet for member review.
