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Treasury programs and interest returns reviewed; staff to post fund‑level interest reports
Summary
Legislative analysts summarized the State Treasurer's investment programs — LGIP, diversified bond fund, idle pool and Millennium Permanent Endowment Fund — and said reports showing interest earned by fund and agency will be posted to the committee SharePoint for follow up.
Christopher Lahoset, a budget and policy analyst with the Legislative Services Office, summarized the State Treasurer's four main investment programs and how interest earnings are recorded and allocated.
Lahoset described the Local Government Investment Pool (LGIP) for cities, counties and school districts; the Diversified Bond Fund (DBF) for longer‑term agency investments (minimum $250,000); the idle pool that manages the state's daily cash flow; and the Millennium Permanent Endowment Fund (MPEF), which invests tobacco settlement proceeds to fund prevention and public health programs.
He provided one concrete figure: "In fiscal year 2024, the idle pool earned over $249,000,000 in interest," Lahoset said.
Committee members raised questions about where interest earnings are posted and whether interest is routed through the general fund or kept with the funds that generated it. Lahoset said the destination of interest earnings is governed by statute and that the treasurer's office maintains reports showing interest earned by fund and agency; he said those reports and a treasurer's "report card" would be added to the committee SharePoint. He also noted there is no single code provision that directs interest for every fund — direction is fund‑specific and would require legislative action to change.
Lahoset and staff committed to posting the fund‑level interest report to SharePoint and said the committee could pursue statutory changes if it wished to alter how interest is allocated.
