LSO staff walk committee through reserve-account history, online spending-policy visuals

Polly Scott and Catherine Camarotti of the Legislative Service Office on Tuesday told the Select Committee on Capital Financing & Investments that an online set of data visualizations and a memorandum provide a history and primer on the reserve accounts supporting the state's four permanent funds, and explained how guarantees have been added over time to smooth spending.

The presentation highlighted how the spending-policy model uses a five-year rolling average market value and a percentage spending policy to determine an annual spending amount. "This is what you could consider a picture of our spending policy model since inception," Scott said, pointing to charts that show volatile investment earnings (dark blue) and a separate, smoothed spending line computed from the rolling average and the policy percentage.

Scott told the committee the Permanent Mineral Trust Fund (PMTF) is the only fund whose investment earnings are distributed to more than one recipient; historically the first 2.5 percentage points have gone to the general fund while amounts above that were split between the Legislative Stabilization Reserve Account (LSRA) and the now-repealed CIPA or were guaranteed by the reserve account. She noted the guarantee to the general fund began in fiscal 2017 and a 1.25…