Treasurer’s office outlines LGIP, idle pool, diversified bond fund and Millennium endowment; idle pool earned about $249 million in FY2024

Christopher Lahoset, budget and policy analyst with Legislative Services Office, summarized the four investment programs managed by the State Treasurer’s Office and reported recent interest results.

Programs described

- Local Government Investment Pool (LGIP): A short‑term, low‑risk pooled vehicle to help cities, counties, school districts and other local governments earn interest on idle cash while retaining liquidity. Lahoset said it is managed under Idaho Code 67‑12‑26.

- Diversified Bond Fund (DBF): A longer‑horizon fund (roughly three and a half years or more) for state and public agencies that balances high‑quality corporate, government and mortgage securities. The DBF carries higher expected return and higher risk than short‑term pools; minimum participation is $250,000 and the fund charges an annual fee (0.017% in the presentation, deducted monthly before distribution).

- Idle Pool: The treasurer’s daily cash management pool that supports the state’s operational cash flow and invests surplus daily in short‑term, high‑quality instruments. Lahoset said the idle pool earned over $249 million in FY2024.

- Millennium Permanent Endowment Fund (MPEF): A long‑term endowment funded by the Master Settlement Agreement with tobacco companies; the fund supports tobacco prevention and public‑health programs while preserving principal.

Questions and next steps

Representative Tanner and other members asked how interest earnings are directed (whether interest on particular funds is credited to the general fund or retained by the source fund). Lahoset said the disposition of interest is determined by statute and that LSO maintains reports showing interest earnings by fund and agency. He said that many funds are governed by separate statutory direction and that addressing the distribution of interest across all funds would require legislative changes across multiple statutes.

Lahoset said staff posted a report on the committee SharePoint showing interest earned by fund and agency and offered to provide further detail on which statutory provisions direct interest to particular funds.

Ending

The treasurer‑programs overview concluded with the committee thanking staff; members said they expect these investment reports to become a routine part of the front‑end budget material.