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State Treasury Performance
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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.
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Two examples of State Treasury savings can be found in Oregon's cash
management needs: Banking services and Short-Term Fund Management.
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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.)
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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 same
period of time.
The State Treasury is the most efficient provider of financial
services available to State agencies.
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For more detailed information on the State Treasury's budget, see:
Senate Bill 5550 (2009)
Ways & Means committee report
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