Treasurer Says State Missed More Investment Income in Second Quarter

Illinois State Treasurer Michael Frerichs says the state earned $7.9 million less in investment income in the second quarter of the state fiscal year, a matter Frerichs attributes to the year-long budget impasse. Despite the six-month budget plan signed on June 30, the final day of the fiscal year, $31 million remains the projection for missed earnings in 2016.

(MICHAEL FRERICHS)

The state of Illinois earned $7.8 million less in investment income in the first quarter of 2016. Threats of unplanned fund sweeps and the need to pay court-ordered bills required the treasurer's office to make short-term investments that prioritized cash availability rather than longer-term, higher-yielding investment opportunities.

With no budget in place for a full year, the treasurer's office remains faced with a number of cash management and investment challenges. The treasurer's office is responsible for managing the state's investment porfolio, ensuring the liquidity, safety and diversification of investments, and producing earnings at or above industry standards.

While Frerichs' office has increased the 30-day rate of return this year compared to last, the rate of increase has not kept pace with the overall market because of the move to a more cautious investment strategy as a result of the budget impasse.