States Look To Stocks To Boost Finances
October 28, 2002
All states invest at least some public monies in equities. But officials in Louisiana, Montana and South Carolina are asking voters next month to approve constitutional amendments next month allowing more public funds to be invested in stocks.
Despite the recent market rally, voters have had several years to witness the risks involved in markets -- and the effort to grant greater latitude to officials to invest could be an uphill struggle.
- Montana voters face two ballot amendments -- one to allow an increase in state trust funds invested and the other to local governments and school districts to invest as much as 25 percent of their group self-insurance funds.
- In a poll taken in late September, 39 percent of respondents in Montana opposed greater investment, 28 percent were in favor and 33 percent were undecided.
- In Louisiana, a pair of ballot questions would allow portions of state higher-education and health funds to be invested in the market.
- In South Carolina, supporters have all but given up on an initiative to allow some of the $21 billion state and various local pension funds to invest in foreign companies.
Nationally, a recent survey by the National Association of College and University Board Officers found that public colleges and universities last year invested on average 60 percent of their endowments in equities.
Source: Ryan Dezember, "States Seek to Invest Funds in Stocks," Wall Street Journal, October 28, 2002.
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