State reports higher returns on investments

For the month of March, interest earnings in Missouri’s securities portfolio totaled $9.7 million, and interest earnings from linked deposits were $114,625. The combined annualized yield for investments was about 4 percent, continuing the steady incline since June 2004 when the yield was below 1.5 percent.

Mark Hughes, director of policy and communications for Treasurer Sarah Steelman’s office, attributes the increase to the country’s rising interest-rate market and to Steelman’s management style since taking office in January 2005.

The treasury department has placed out its timed- and linked-deposit investments for short time periods in order to take advantage of higher interest rates, rather than placing out investments for two or three years, he said.

“Timing the investments to make sure you maximize the yield increases that result from changes in the Federal Reserve rate is the key to maximizing the return,” Hughes said. “Treasurer Steelman and the Investment Division have … timed those investments so that when rates increase, our yield will increase as the investments roll over.”

Also according to the report, state receipts in March totaled $1.7 billion and state disbursements totaled $1.7 billion. As of the end of the month, the budget reserve fund had a balance of $230.1 million and the general revenue fund had a balance of $278.6 million.

Missouri’s outstanding public debt totaled $2.5 billion at the beginning of the current fiscal year on July 1, and the repayment schedule stands at $3.7 billion through 2029, the report states.

State debt is issued through three general types of debt instruments: general obligation bonds, for which the outstanding principal totaled $790.9 million as of July 1; revenue bonds issued through the Board of Public Buildings, which, as of July 1, had an outstanding principal of $602.9 million; and “other debt and payments,” which had a balance of $1.1 billion.

The other debt and payments category includes bond debt for several regional convention and sports authorities, bonding for an arena at the University of Missouri-Columbia, highway bonds, and lease-purchase agreements for several prisons and mental health facilities.

In fiscal-year 2006, Missouri is expected to pay $85.6 million debt service on general obligation bonds, $44 million debt service on revenue bonds and $111.2 million debt service on bonds in the category of “other debt and payments,” according to the report.

This story originally appeared in SBJ’s April 11 free e-news Daily Update. Click here to register.[[In-content Ad]]