The state treasury's interest earnings on its investments of more than $3 billion increased last quarter by $5.7 million over the same quarter last year to $18.5 million, state Treasurer Dennis Milligan told the state Board of Finance on Monday.
Milligan, a Benton Republican, later said increased interest rates "had some input" into the increased interest earnings, "but it wasn't a significant amount."
The state treasury's investment portfolio now totals about $3.5 billion, including $3 billion in bonds, $544 million in demand accounts and about $155,000 in money market accounts, Milligan spokesman Stacy Peterson said after the Board of Finance's meeting.
In fiscal 2017, which ended June 30, the state treasury earned $57.5 million in interest on its investments -- the largest amount since fiscal 2009's $72.6 million.
The earnings totaled $22.3 million in fiscal 2015 and then $48.9 million in fiscal 2016, the office's records show. Milligan assumed office in January 2015, midway through fiscal 2015.
In fiscal 2018, Gov. Asa Hutchinson's plan to raise about $50 million a year in state funds to match $200 million a year in federal highway funds begins relying in part on $20 million a year from the treasury's earnings.
The Republican governor's highway plan -- enacted by the Legislature in a 2016 special session -- also relies on using 25 percent of the state's annual general-revenue surplus and several million dollars a year in reallocated funds to generate enough state funds to match the federal highway dollars.
Milligan said in an interview that he doesn't expect the state treasury to have any problem raising the $20 million in earnings for the governor's highway plan.
Milligan earlier told the Board of Finance, "I have to tell you I'm not getting tired of coming before you guys with good news."
He said the treasury earned $5.2 million last quarter from its short-term investment portfolio, up from $4.6 million in the same quarter last year. The treasury earned $13.3 million last quarter from its long-term portfolio, up from $7.2 million in the same quarter last year.
"Over the last three quarters, we receipted an average of $18.1 million, which is the same amount that was receipted in the entire fiscal year 2013," Milligan said.
The state Board of Finance includes the governor or his representative, treasurer, auditor, bank commissioner, director of the Department of Finance and Administration, securities commissioner and two appointees each from the House speaker and Senate president pro tempore.
Metro on 11/07/2017