Tax dollars invested will receive fair return for first time in 50 years
JEFFERSON CITY, MO – December 29, 2009 – (RealEstateRama) — A little more than six months after being signed into law, legislation developed by State Treasurer Clint Zweifel will allow him to return more on investments he manages for Missouri taxpayers beginning January 1. The legislation, Invest in Missouri, received the unanimous support of the Senate and the House and was signed by Gov. Nixon on June 29.
“Prior to Invest in Missouri, I was not allowed by law to get taxpayers a fair shake on the investments I placed in Missouri financial institutions,” said Treasurer Zweifel, who manages a $3.5 billion investment portfolio for taxpayers with almost $500 million of that in Missouri financial institutions. “Starting January 1, that restriction will start phasing out and I will be able to get a fair return for taxpayers for the first time in 50 years. This is even more important as we face these tough economic times. More money will be earned on tax dollars and by putting more money in Missouri financial institutions, the increased liquidity can help them reinvest in their communities.”
Treasurer Zweifel said Invest in Missouri will return approximately $10 to $15 million per year to taxpayers’ investments when the statutory interest rate cap that tied state time deposits, similar to a CD, to the return of short-term U.S. Treasury securities is gone. That U.S. Treasury yield has been as low as 0.20 percent this year. Removing the restrictive cap will allow the state to receive a yield closer to the rates offered by banks to an individual, business or any other government entity in Missouri. In 2010, the first $7 million of time deposits held by a financial institution will still be subject to the U.S. Treasury yield limit, but any deposits above that threshold will be set at a market rate. The cap will apply to time deposits of up to $5 million in 2011, $3 million in 2012 and $1 million in 2013. The cap will be eliminated in 2014, and Treasurer Zweifel will then receive market interest rates on all time deposits.
“Ultimately I plan on placing an additional $250 million in Missouri community institutions,” Treasurer Zweifel said. “These will be funds that not only provide a better return for taxpayers, but can then be loaned out in communities to be reinvested. This is a foundation for creating jobs and growing our economy.”
To facilitate greater use of time deposits and transparency in his investment process, Treasurer Zweifel also said he had launched an online system for financial institutions to apply for time deposits. The system allows Treasurer Zweifel to post available funds every two weeks so that financial institutions may request them at www.treasurer.mo.gov/TimeDeposits.
Invest in Missouri also included enhancements to the Missouri Linked Deposit Program, a low-interest loan program Treasurer Zweifel manages. Those enhancements went into effect August 28. More than $200 million in loans have been placed from the loan program, with another $520 million available.
“I remain committed to job creation and retention in Missouri. Whether it is the Missouri Linked Deposit Program, taxpayer investments or $35 million for job creation through my role as chair with the Missouri Housing Development Commission, we must remain focused,” Treasurer Zweifel said.
Office of State Treasurer Clint Zweifel
Director of Communications &
Missouri State Capitol, Room 229
P.O. Box 210
Jefferson City, Missouri 65102
(573) 418-2923 (cell)
(573) 751-7595 (office)
(573) 751-9443 (fax)