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Treasurer programs, pooled funds and interest flows discussed; staff to post fund-by-fund interest reports
Summary
Legislative staff summarized programs managed by the state treasurer — Local Government Investment Pool, Diversified Bond Fund, idle pool and Millennium Permanent Endowment Fund — and said fund interest-direction is set by statute; staff promised and posted a fund-level interest report to SharePoint.
Christopher Lahoset, budget and policy analyst, summarized the treasurer-managed investment programs and answered committee questions about interest earnings and where interest is credited.
Programs explained: Lahoset described four programs the treasurer manages: the Local Government Investment Pool (LGIP) for municipalities and school districts; the Diversified Bond Fund (DBF) for longer‑horizon investments (minimum $250,000); the state idle pool that manages daily cash-flow and invests short‑term surplus; and the Millennium Permanent Endowment Fund (MPEF) that invests proceeds from the tobacco master settlement and supports related public health programs.
Interest flows and reporting: Committee members asked how interest earnings on large cash balances are reported and whether interest returns automatically flow back to the general fund. Lahoset said the statutory direction for interest depends on each fund’s authorizing statute and that interest typically posts to the fund that earned it unless statute directs otherwise. He said LSO had posted a fund‑by‑fund interest earnings report to SharePoint and agreed to post an additional spreadsheet showing which statutory citations direct interest to which fund.
Why it matters: the committee noted accumulated cash and higher market interest rates mean interest earnings are now material for fund balances and for potential general fund revenue if statute routes earnings there. Representative Tanner and others asked for a clear inventory; Lahoset said that inventory is on SharePoint and that changing interest routing would require legislative action across multiple statutes.
