State Treasury Performance
The Oregon State Treasury has an annual budget of under $19 million ($37.7 million for the 2009-2011 biennium) and includes no General Fund dollars. The State Treasury relies on client fees, investment returns, and other sources of earned income to operate. Some fees are paid by State agencies that receive General Fund dollars, so the State Treasury is indirectly reliant on Oregon's General Fund for about 7% of its revenue.
Non-General Fund sources include things like:
- PERS and other trust fund management fees (42% of the State Treasury's budget)
- College Savings Program management (9%)
- Fees from banks for managing the Public Funds Collateralization Program (2%)
All of these fees provide a service from the State Treasury that would otherwise be more expensive. Currently, if a State agency (or local government) uses the Treasury for services (such as investing, bonding, or cash management), they pay a fee based on their actual use.
If the State Treasury were to cut those services, the agency would have to get those services from a more expensive source, ultimately resulting in higher costs.
Examples of Savings
Two examples of State Treasury savings can be found in Oregon's cash management needs: Banking services and Short-Term Fund Management.
In providing banking services and management of the Oregon Short Term Fund (the fund which contains most agency budgets and funds from many local governments), the State Treasury saves, respectively, $2,469,600 and $37.8 million compared to market rates.
(* Aside from seeking out management of the Oregon Short Term Fund, another alternative is to simply invest in secure -- but low-rate -- 91-day U.S. Treasury Notes. However, State Treasury management paid out $90 million above what U.S. Treasury notes would have paid out in the same period.)
In fact, not only do the cumulative savings in those two examples dwarf the State Treasury's costs for those services, they are more than double the then-annual State Treasury budget over the sameperiod of time.
The State Treasury is the most efficient provider of financial services available to State agencies.
For more detailed information on the State Treasury's budget, see:
Senate Bill 5550 (2009)
Ways & Means Committee Report