What does the Illinois treasurer do? Here’s an interview with Treasurer Michael Frerichs

Frerichs

BlueRoomStream.com

While the treasurer does the investing, where he can put the money is largely regulated by state law as written by the Illinois General Assembly.

“So in general, the General Assembly does not like risk,” Frerichs said. “They don’t want me investing in the stock market, they don’t want me investing in gold or baseball cards, they want things that carry little risk, and also maintain liquidity.”

Frerichs issued a news release recently noting he was the first treasurer since Republican Judy Baar Topinka, who held the office from 1994 to 2007, to earn more than $1 billion in investment earnings on state funds. That was largely due to the fact that Frerichs, like Topinka, served more than one term, unlike all of the other state treasurers since 1977.

The treasurer noted he has pursued changes in the General Assembly allowing him to invest in secure public sector bonds, such as those issued by school districts. He also lobbied for a change allowing the office to invest in highly rated corporate bonds, such as those issued by Caterpillar, Deere & Co. and Pfizer.

Frerichs also noted the difference between the state’s roughly $42 billion General Revenue Fund and the hundreds of other state funds which produce most of the capital that he is charged with investing.

The budget negotiations covered by the media each year are largely centered on the General Revenue Fund, which goes to things like schools, pensions and state agencies. That fund contains the money that lawmakers have the most discretion to spend, and it’s also the fund with a $5.7 billion backlog of unpaid bills.