Arizona State Treasurer Dean Martin Says State’s Great
Written on August 31st, 2007
State Treasurer Dean Martin wants everyone to know the money they’re sending the state’s way is finally in good hands.
On a three-day tour of Southern Arizona, Martin met with local officials in an effort to put to rest their worries about the turmoil in the department surrounding the former treasurer, David Petersen, and restore their confidence in “the state’s bank.”
Petersen did not seek re-election to office last year after coming under fire and possible criminal investigation for improperly keeping speaking fees, billing the state for personal travel expenses and hiring friends whose primary responsibilities were to push his Character First training program in businesses and schools. The Arizona Treasurer’ Office collects and distributes more than $36 billion each year in fees and tax revenue. It also manages nearly $12.2 billion in 26 different investment portfolios, most as a service to local governments.
“Pima County is our largest investor,” Martin said in an interview as a reason for his visit here.
“We want them, as well as all the rest of our investors in Southern Arizona, to know we’re off to a good start, rebuilding the investment and portfolio management staff and putting in the checks and balances to protect their funds.”
The Treasurer’s Office is also working to improve communication by putting the database online and meeting with each investor quarterly to update them on the status of their investment pool.
Martin remains upbeat despite the economic setbacks in the housing industry. Although economic growth may slow, he said better fund management will keep the state’s portfolio benchmarks on the rise.
That includes the $2.4 billion education endowment fund.
“We’re estimating a $69.26 million distribution for fiscal 2008, more than double fiscal 2007, and we’ve been able to do that with a 7 percent rate of return, above the rate of inflation, without increasing land sales,” he said.
By 2010 he said he expects the distribution to be more than $90 million,
“The endowment doesn’t cost the taxpayers a cent,” Martin said. “It protects us from the boom and bust that always part of our state’s economy, and it gives us another tool in our toolbox to focus on our investment in education, for the long term, without depending on short-term decisions by the legislature.”
Contact Philip S. Moore at firstname.lastname@example.org or at (520) 295-4238.
Philip S. Moore, Inside Tucson Business
Arizona State Treasurer Dean Martin: K-12 Schools to Get $70M from Common School Fund
Written on August 30th, 2007
If you’re interested in learning how to earn more than an 11 percent return on your money, you might want to talk to Dean Martin, the state treasurer, who is about to pony up nearly $70 million to Arizona’s K-12 schools, more than double last year’s amount from the Common School Fund of the state’s Permanent Endowment.
“It’s all from improved performance on our investments,” Martin told the Herald/Review in a stop on his weeklong swing through the southeast part of the state. “And the Legislature can’t adjust their formulas for funding education based on our performance. It’s the most protected source of revenue we have.”
The Permanent Endowment — a financial feature unique to states in the West — exists in perpetuity to fund 13 “beneficiaries” in Arizona with the invested proceeds from the sale of state lands. Currently valued at $2.45 billion, the principal is never touched, and distributions to schools are made based on a five-year “rolling average” to mitigate market fluctuations.
Other beneficiaries — each with their own trust land and separate trust fund — include the Arizona School for the Deaf & Blind, the School of Mines and penetentiaries.
The $70 million is a landmark increase and is good news for school districts, teachers and students as well. According to statute, the money may only be used for class size reduction, teacher pay raises, teacher training, AIMS assistance and dropout prevention programs.
Funds are allocated based on weighted student count, and districts can determine how to expend the money within the statutory guidelines. Commonly called the “classroom site fund,” the fiscal year 2007-08 historic distribution works out to approximately $1,430 per full-time teacher or classroom.
“Some people are under the impression that the jump is because of recent land sales that commanded high prices,” Martin said. “But that’s not the case. We haven’t even received most of that money yet. Another billion dollars will be deposited into the endowment over the next seven years, which we’ll invest and then be able to grow money even faster.”
Martin believes the “endowment model” is key to the long-term funding of education that is a state obligation that “doesn’t go away.”
Using all-day kindergarten as an example, he said that when it was passed by the Legislature, it wasn’t priced out “all the way through” to include new classrooms that will be needed for the larger number of students serviced by schools in a state with a growing population. “You can’t create a permanent liability for the state with money that may not always be there,” he cautioned.
The youthful Martin gets excited when talking about his office’s successful management of the endowment’s portfolio. “It’s like a train leaving the station,” he said. “It picks up momentum.”
The forecast for distribution to the Common School Fund in 2010 is $90 million.
The treasurer explained that the state holds approximately 8.1 million acres in trust and that only 17 percent of Arizona’s land is in private hands. He believes his office has been more creative and “retail” oriented than other states when marketing parcels for public auction. Martin’s mother was a high school math teacher.
Cindy Skalsky, Herald/Review
Sierra Vista Herald