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State Treasurer outlines proposal for long-term generational investment accounts; committee defers amendments for further review
Summary
The State Treasurer presented a proposal to create generational investment accounts funded by periodic transfers to capture long-term compounded returns; the committee discussed amendments and deferred further action.
The State Treasurer presented a multi-decade plan to create a generational investment account designed to capture compounded returns for long-term state uses such as school funding, infrastructure or future tax relief. The proposal described periodic transfers (sponsor referenced a $100 million annual example for 30 years) into a permanent account intended to preserve principal and distribute a portion of investment earnings to general purposes on a long timeframe.
In his presentation the treasurer emphasized compound returns and long horizons: he described a 10% assumed long‑run return scenario and said, “If you put a hundred million in for every 30 years, that's $3,000,000,000 … it's whether you wanna … basically spend $3,000,000,000 and get $1,600,000,000 for the next 30 years, or you try to save $26,700,000,000 and get that same return of $1,600,000,000.” He framed the measure as an effort to diversify state revenues over time and reduce reliance on federal funding.
Committee members asked technical and fiscal questions about funding sources, governance, accounting and whether transfers would affect current state obligations. The treasurer and staff explained the plan would use a small portion of excess investment returns and that transfers would be structured to preserve compounding over long horizons. Several members requested more time to review the proposed statutory language and accounting changes.
Committee counsel and the treasurer presented draft amendments that would (a) align accounting and investment reporting with existing permanent funds, (b) prevent early withdrawal of transfers to preserve compounding, and (c) define investment earnings and periodic review requirements. Senators raised drafting concerns and the treasurer agreed to work with staff on wordsmithing and to return with refined amendments.
No formal committee vote on the underlying policy occurred during the hearing; the chairman said the committee would continue work on the bill at a later session, indicating a morning-and-noon schedule for further consideration.
Quotes from witnesses and members in the transcript stressed both the potential upside from long-term compounding and the need for careful drafting to avoid unintended consequences for state cash flow and for relationships with banks and custodians.
Outcome: discussion and amendment drafting; no final action taken. Committee scheduled additional work and resumed consideration at a later date.
