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Treasurer's office outlines investment pools and posts interest reports for member review
Summary
The state treasurer's office described four investment pools used to manage idle cash and local government funds and said an interest-by-fund report will be posted to committee SharePoint so JFAC members can track earnings and where interest is directed.
Christopher Lahoset, a Legislative Services Office budget and policy analyst, summarized the state treasurer's investment programs and the treasurer's year-to-date earnings reports for the committee.
Lahoset described four main programs the treasurer manages: the Local Government Investment Pool (LGIP) for cities, counties and special districts; the Diversified Bond Fund (DBF) for longer-term bond investing; the Idle Pool, which manages the state's daily cash flow and short-term investments; and the Millennium Permanent Endowment Fund (MPEF), which manages master settlement agreement funds for tobacco-related programs.
On earnings, Lahoset told members the idle pool earned over $249 million in interest in fiscal year 2024. He explained statutory direction determines whether interest stays with a fund or is transferred to the general fund and said the treasurer's office publishes reports showing interest earnings by fund and agency. "On your SharePoint, I posted a report that shows the interest earnings by fund by agency," he told the committee.
Why it matters: members asked how interest earnings interact with the budget reconciliation and whether interest that accrues to particular funds is visible to the Legislature for appropriation decisions. Lahoset said the distribution of interest is governed by statute and that multiple codes govern how interest is credited; changing those flows would require legislative changes.
Next steps: Lahoset and Legislative Services Office staff said they will post spreadsheets to SharePoint that list interest earned by fund, and committee members asked staff to include the statutory direction for where those earnings flow so JFAC can determine whether code or appropriation changes are necessary.
