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Treasurer says smoothing overpayment refunds would ease cash‑management pressures; committee votes 'ought to pass' on SB 652
Summary
State Treasurer Monica Muspellin told the Ways and Means committee that the treasury's cash position has declined from about $2.1B to $1.2B and that extending the schedule for returning tax overpayments would help liquidity; the committee voted 19–0 for 'ought to pass' on SB 652 during executive session.
The Ways and Means subcommittee held a work session on SB 652 and heard a detailed update from State Treasurer Monica Muspellin on the state’s cash position and liquidity management.
"As of Friday, our cash balance is a total of $1,200,000,000 compared to about $500,000,000 what we had exactly 03/20/2019," Muspellin said, placing the current balance in a multi‑year context and noting a decline from $2.1 billion in an earlier year. She attributed the change to multiple drivers including lower receipts, repeal of the interest and dividend tax, continued ARPA spending, and structural timing of disbursements.
Muspellin described how the treasury pools receipts (liquor, lottery, general fund, tax receipts) and manages liquidity in two buckets—funds needed within 12 months and funds that can be invested longer to improve yields—favoring liquid US fixed‑income securities so funds can be accessed when required.
Members asked when the treasury might need to issue short‑term debt. Muspellin said the department has not needed to borrow short term in recent years but noted that the December‑to‑April tax cycle typically produces the lowest balances; in that window the treasury has previously liquidated securities to meet obligations. On the effect of refund events, she said a single refund above about $50,000,000 would meaningfully hurt cash management.
SB 652 would smooth and extend the timetable for refunding tax overpayments instead of a sharp drop to a 250% schedule scheduled in 2029. Muspellin said extending refund timing would help the treasury manage liquidity and that the choice of schedule is a legislative policy decision. Committee members discussed guardrails, reserves and the possibility of dedicating funds or applying alternative accounting/legal treatment, and they asked the treasurer to return with updated monitoring information if conditions deteriorate.
In executive session the committee moved 'ought to pass' on SB 652. Representative Murphy moved the OTP motion, it was seconded, and the clerk recorded a roll call with votes in favor; the motion passed 19–0. The bill will appear on the committee’s consent calendar.
