LITTLE ROCK, Ark.- The State Treasury reported first-quarter earnings of $6.8 million for the fiscal year 2021, which ended September 30.
According to a news release sent Tuesday from the Arkansas Treasurer of State’s Office, the earnings push the total amount earned to more than $400 million during Treasurer Dennis Milligan’s administration.
“As I reported to the State Board of Finance in our previous meeting, FY 21 is shaping up to be a difficult year for the Treasury,” Milligan said. “While it was undoubtedly a tough quarter, I’m learning to celebrate the successes where I can. As of Sept. 30, my administration has earned the State and the hardworking taxpayers of Arkansas more than $400 million dollars. When I first came into office, I pledged to make Arkansans’ tax dollars work harder, and we are doing that. We are doing the best we can with the money we’ve been entrusted, and I’m very proud of this accomplishment.”
In the release, Milligan also addressed public concerns about why it seems the Treasury’s investment portfolio is not rebounding as quickly as many constituents’ 401K plans appear to be.
“Most 401K plans are made up of both stocks and bonds, and typically the younger someone is, the higher percentage they have of higher-risk investment types such as equities or commodities. Your State Treasury, on the other hand, is limited to more stable, fixed-income securities, which produce lower yields,” Milligan said. “So our ‘rebound’ is going to be slower and look more like someone’s 401K account who is nearing retirement, with investments in CDs, municipal bonds and other more secure assets.”
Milligan gave his investment report to the State Board of Finance Tuesday during its regular quarterly meeting.
Milligan also said the Treasury had created a new program called “Invest Arkansas”, which authorizes treasury investment staff to purchase municipal bonds of state universities, school districts, cities and counties. It has secured more than $50 million in Arkansas bonds, according to Treasury.
“Like many families in our state who are taking the opportunity to refinance their home mortgages, entities within Arkansas are using this opportunity to refinance their public debt to get better rates and reduce their payments,” Milligan said. “Through ‘Invest Arkansas,’ we are keeping money in Arkansas and earning better yields at a time when interest rates are at zero percent.”