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Treasurer outlines investment pools and interest earnings; members ask where interest is credited
Summary
The state treasurer's office described four investment pools (LGIP, Diversified Bond Fund, idle pool, and Millennium Permanent Endowment Fund) and acknowledged interest-crediting rules vary by fund; committee members requested reports showing where interest earnings are recorded and what statutes govern those flows.
Christopher Lahoset, a budget and policy analyst in the Legislative Services Office, summarized the Idaho State Treasurer's investment programs and recent interest earnings for members of the Joint Finance-Appropriations Committee.
Lahoset described the Local Government Investment Pool (LGIP) as a low-risk short-term vehicle for cities, counties, school districts and other local governments; its investments focus on short-term high-quality securities. He explained the Diversified Bond Fund (DBF) is intended for longer horizons (about 3.5 years or more), has a higher expected return and higher volatility and requires a $250,000 minimum initial investment.
He described the idle pool (often called the "Idaho pool") as the treasurer's program for managing the state's daily cash flow, investing short-term surpluses while maintaining liquidity for operations; the program is governed by Idaho code sections cited in the presentation. Lahoset noted the Idaho pool earned about $249 million in interest in FY2024 (presentation figure).
He also summarized the Millennium Permanent Endowment Fund, which manages settlement proceeds (the states Master Settlement Agreement receipts) to fund tobacco-prevention programs over the long term.
Committee members asked where interest earnings are recorded and whether interest sometimes bypasses the general-fund appropriation process. Representative Tanner asked whether interest that accrues to dedicated funds is captured by JFAC; Lahoset and staff replied that the direction of interest earnings is set in statute and the treasurers office maintains reports that show interest earned by fund and which agency or fund receives the earnings. He said changing where interest is directed would require legislative action in multiple statutes because many funds and dedicated accounts determine interest-credit rules individually by code.
Ending: Committee members asked that the treasurer's office publish or place on SharePoint the report showing interest earnings by fund and the statutory direction for each fund so JFAC can review where interest flows and whether adjustments to statutory crediting are warranted.
