DOES ANY ONE KNOW ANY THING MORE ( IN DEPTH) ABOUT THE LOCAL GOVERNMENT INVESTMENT POOL, DESRIBED BY MR. GAVIN IN THE P-I RECENTLY? HE INDICATED THAT IT HAS OVER THREE BILLION DOLLARS FROM SOME 400 JURISDICTIONS IN WASHINGTON STATE. CAN YOU TELL ME IF THE CITY OF SPOKANE HAS ANY FUNDS INVESTED?

-- ROBIN CORKERY (robin_corkery@ml.com), October 27, 1999

Answers

I believe all cities are invested, but you can check the below site for verification. The local government investment pool is a very good thing for Washington State. To argue otherwise is iresponsible.

http://www.wa.gov/tre/ar_toc.h

-- Diana (washingtonian@hotmail.com), October 27, 1999.

Here we go again on this issue.

The Local Government Investment Pool is a short term account used by local governments to put the tax money that they collect in for the short period before they have to pay their bills.

Think of it as a checking account for local governments. There are specific times when money comes in (like property tax and MVET revenue that I believe are only distributed to local governments twice a year). But just like the rest of us, the bills the government has to pay are due at various times of the month and year. So when they receive their tax and other revenue, they deposit it into this investment pool, and when the bills come due, they withdraw the money from the pool.

One of the claims that supporters made was that this account meant that local governments had a $3 billion surplus. While that was the amount in the fund at the time, you can't call this a surplus unless you consider the amount of money you have in your checking account right after you deposited your paycheck a surplus too. You'll note that Tim Eyman NEVER brings up that $3 billion claim anymore.

It was pretty funny how this all came about. Apparently Gavin was the first to point this investment pool out to the Yes campaign as a possible slush fund. I guess the campaign was willing to abandon their "big media is against us" motto when they jumped on the lead without double checking the facts. Gavin, it turns out, was also the reporter to break the news that the investment pool just ain't a surplus and highlight just how little Tim Eyman actually knows about how government operates.

-- Patrick (patrick1142@yahoo.com), October 27, 1999.

I can only speak for Grays Harbor County (GHC)which has $18 million invested in the LGIP. GHC has other investments. I total of $47 million of which $23 million is listed as surplus cash. This isn't just cash flow, in and out money collected and waiting to be spent. GHC earned $1.7 million this year in interest on these investments. That is over 8% of the GHC general fund budget! OBTW, GHC has $6 million in bond debt, all of which is being repaid from specific revenue sources. None of the surplus is committed to repay the bonds.

I suspect other local governments have similar fat cash positions, but I don't know for sure. GHC Transit is not in such good shape though.

-- Art Rathjen (liberty@coastaccess.com), October 27, 1999.