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Treasurer’s office describes four investment programs and confirms interest reports will be shared with JFAC
Summary
LSO and treasurer’s-office materials described four investment programs the state uses — LGIP, Diversified Bond Fund, Idle Pool, and the Millennium Permanent Endowment Fund — and noted the Idle Pool earned about $24.9 million in FY2024.
Christopher Lahoset, a budget and policy analyst with the Legislative Services Office, summarized the programs the State Treasurer’s Office runs to manage public cash and investments and explained how interest earnings are recorded.
Lahoset described four principal programs: - Local Government Investment Pool (LGIP): a short-term, low-risk pool for local governments (cities, counties, school districts) to invest idle funds while retaining liquidity. - Diversified Bond Fund (DBF): a longer-term bond fund (three-and-a-half years or longer horizon) for state and public agencies; benchmarked to a blend of Bank of America Merrill Lynch indices; minimum participation $250,000; higher yield and higher risk than LGIP. - Idle Pool: the state treasury’s daily cash-management pool that matches incoming and outgoing flows and invests short-term surplus for operating liquidity; Lahoset reported the idle pool earned over $24,900,000 in FY2024. - Millennium Permanent Endowment Fund (MPEF): the long-term endowment receiving Master Settlement Agreement (MSA) tobacco payments, invested to produce ongoing support for tobacco-prevention and related public-health programs.
Committee members asked how interest earnings are directed. Lahoset said the destination of interest earnings varies by statute and by fund; he told the committee his office posted a report on the JFAC SharePoint showing interest earnings by fund and agency and said he would add a version that shows where those earnings are credited. Representative Tanner asked whether interest that accrues off-budget can be routed through JFAC; Lahoset said the current directions are set in statute and that changing the destination of interest would require legislative action across multiple code sections because many funds are established separately.
Why it matters: interest on large, set-aside balances is now a material revenue source for various funds; the committee requested clear documentation so it can consider whether any statutory changes or appropriation actions are needed.
Ending: Lahoset said staff from the treasurer’s office helped prepare the materials and additional spreadsheets showing interest by fund and agency are available on SharePoint and will be expanded if committee members request further breakdowns.
