Photo: Office of the Missouri State Treasurer
FOR IMMEDIATE RELEASE
Wednesday, February 11, 2009……Zweifel Launches INVEST IN MISSOURI
Initiative to reinvest $1 billion in Missouri
JEFFERSON CITY – State Treasurer Clint Zweifel introduced INVEST IN MISSOURI today, his statewide initiative to create and retain jobs and to reinvest nearly $1 billion in Missouri communities.
INVEST IN MISSOURI, which requires legislative action, would increase eligibility in the Missouri Linked Deposit Program, as well as increase the amount of State funds invested in community banks throughout Missouri. The legislative action would result in an estimated $1 billion being reinvested statewide….
“I am looking forward to talking about INVEST IN MISSOURI with all legislative leaders, so that we can start putting investments back into Missouri as soon as possible,” Treasurer Zweifel said. “This is an opportunity to come together to do what is best for the citizens, and to move job creation and community investment forward in Missouri,” Treasurer Zweifel said.
The first part of INVEST IN MISSOURI calls for increasing use of the Missouri Linked Deposit Program, which is administered by the State Treasurer’s Office. The Linked Deposit Program is designed to place State funds with community banks at below-market rates so the community bank can issue loans to borrowers at a reduced rate. Loan savings is usually 2 to 3 percent to the borrower. The program, which has a statutory $720 million cap on it, is about 30-percent utilized currently. To overcome the hurdles inhibiting the Linked Deposit Program’s effectiveness, Treasurer Zweifel called for streamlining the application process, reducing bureaucratic obstacles for businesses and increasing program eligibility to expand job growth in agriculture, small business, public works and alternative energy.
“INVEST IN MISSOURI allows us to make the Linked Deposit Program dynamic so that we are moving Missouri’s economy forward by investing in the new economy,” Treasurer Zweifel said.
The second part of the INVEST IN MISSOURI initiative focuses on the placement of State funds in community banks, which is a separate statutory investment from the Missouri Linked Deposit Program. Treasurer Zweifel said INVEST IN MISSOURI requires legislative action because current State law includes a disincentive actually discouraging the State from placing deposits in Missouri community banks.
“Missouri is one of two states in the nation, and the State Government is the only government entity in Missouri, which caps the interest rate taxpayers receive when their funds are invested in community banks,” Treasurer Zweifel said. “By removing the cap, and combining with the Missouri Linked Deposit Program, our office can reinvest $1 billion in Missouri communities.”
The legislative change to the interest-rate cap would also result in an additional $10 million coming back to Missouri taxpayers because of the increased interest rate returns.
“Through INVEST IN MISSOURI, we can ensure that taxpayers are investing in Missouri’s future success and are receiving a great return on their money,” Treasurer Zweifel said.
[emphasis added]
This is the type of pragmatic solution we should expect from all of our public servants. Practical money management from the Missouri State Treasurer is a good thing. What’s not to like? In the time lag between income and outgo state funds can be invested in very safe places.
Given the relatively large amount of state money available this can have a very positive economic impact on the state in two ways. It places a significant amount of money safely into a place in the economy that can utilize the resource to help alleviate the current downturn in available money for reinvestment in the economy and it can generate increased interest return to the state, adding a not insignificant amount of funds to state income.
With prudent money management and the exercise of due diligence on the part of the State Treasurer’s office this is a smart thing to do. As I said before, what’s not to like?
The trick will be in getting the Missouri General Assembly to act in a timely manner.
Photo: Office of the Missouri State Treasurer