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PRESS RELEASEOffice of Missouri State Treasurer |
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PRESS RELEASEOffice of Missouri State Treasurer |
JEFFERSON CITY – State Treasurer Sarah Steelman today commended the Missouri Senate and House of Representatives for adopting versions of a proposal she has made that will save Missouri more than $1 million in General Revenue Funds.
"This is smarter, more efficient government,” Steelman said. “This change will make the Treasurer’s Office operate more like private-sector businesses and generate more than $1 million in General Revenue to help the Legislature fund essential programs for citizens."
The change is part of Steelman’s efforts to modernize the Treasurer’s Office. Under the state constitution and statutes, the treasurer’s office is responsible for managing and investing more than 800 separate funds through three divisions.
Under the old system, the costs of managing these funds are paid out of General Revenue. Under Steelman’s business-like model, the funds will pay for their own operation, netting a savings of $1 million for General Revenue.
“It’s high time we make government work more like the real world,” Steelman said. “This will make the funds pay for their management costs and free up $1 million in General Revenue for programs to help older citizens, education, veterans and disabled children.”
Steelman stressed that the change will not increase funding for her office, simply make the funds managed pay for the operations.
“The budget requested for the Treasurer’s office is exactly the same amount as appropriated for the Treasurer’s office last year,” She said. There is no windfall, no increase, no additional money for us, just better government for Missouri citizens.”
Steelman noted that the savings is a net gain for General Revenue, because not all of the earned interest lapsed into General Revenue, rolling instead back into the original fund as required by law.
“This is $1 million in money that is saved to General Revenue by making the work pay for itself,” Steelman said. “This is not just pass-through budget entries that shift costs from one fund to another.”
The legislation sets a cap of one-tenth of one percent -- ten basis points -- of interest earnings of the funds managed that can be used to pay for management costs. Lawmakers must appropriate the actual amount that can be used to manage the funds, as is now done with the General Revenue-based system. That cost would be unchanged from the previous budget year, and is about 7 basis points, which is 30 percent less than the cap set by the legislation.
“Private companies doing this work typically would charge about 25 basis points, or one-fourth of one percent of interest earned,” Steelman said. “In comparison, our costs for doing this will be less than one tenth of one percent of interest earnings.”
Steelman did caution lawmakers against attempting to play politics with efforts to save tax dollars for essential programs for citizens.
“We must work together to help improve state government for the people we serve,” Steelman said. “The best interests of citizens will not be served by those who attempt to mislead the public for their own political gain.”
In the Senate, the change is included in SB 270, which has been approved by the upper chamber and sent to the House. In the House, the measure is HB 468, which received first-round approval on Wednesday. The change was added as an amendment to both measures, which are more comprehensive bills that will modernize the state’s banking laws to bring Missouri investments back to the state and revitalize the linked-deposit loan program to create jobs, stimulate the economy and boost agriculture in Missouri.
CONTACT: Mark Hughes, Director of Policy and Communications, (573) 751-7595