04/04/19 -- HB 1029 -- Increases the limit on investments in Linked Deposits by the Treasurer
HB 1029, introduced by Representative Jack Bondon (Republican - District 56) increases the dollar amount limit that the Treasurer can invest in linked deposits. The Linked Deposit program is defined as follows on its official website:
"Through the program, the Office partners with qualified-lending institutions to provide low-interest loans to help grow and expand economic opportunity across Missouri. By reducing the interest rate on certain loans borrowers can use to improve their businesses, the program helps Missouri financial institutions better serve Missouri-based companies and agricultural operations. The program also provides funds for local governments to serve the interests of their constituents."
I am usually not in favor of economic development programs that provide preferential treatment to some businesses over others, so I am inclined to be suspicious of this program. That said, it is not unreasonable for the Treasurer to invest funds somewhere (as otherwise they would use value to inflation). Any investment of taxpayer funds, even on a short-term basis, will naturally include preferential treatment to some extent. For example, one would not condone investing tax funds in a poorly performing stock simply because the State also invests in a competing company.
So if I am to accept that limited investment of taxpayer funds in the private sector is acceptable, then it stands to reason that the goal at that point should be to maximize returns for the taxpayer while minimizing risk. The Linked Deposit program appears to be an acceptable balance in that regard, so I don't necessarily object to expanding it slightly as this bill seeks to do.