Arizona State Treasurer Dean Martin: State Investments Safe’
Written on November 30th, 2009
Other states have had runs of withdrawals from their public investment pools because of worries about their holdings in the mortgage industry but Arizona isn’t in the same boat, state Treasurer Dean Martin said Friday.
Florida suspended investment pool withdrawals because of a run by local governments spooked by downgrades of that state’s extensive mortgage-based holdings. Montana also had a run.
State investment pools are similar to private money-market funds. Cities, counties, school districts and other local entities invest money on a short-term basis in the funds and withdraw cash when needed to make payrolls and pay other operating costs.
Martin said Arizona reviewed its $12 billion state and local government investment pool when he took office in January and is sticking with a course of avoiding risky mortgage-related investments.
“My philosophy is safety first, then liquidity, then yield,” said Martin, a Republican and a former state senator.
Martin said the Treasurer’s Office invests in highly rated mortgage-related products but has never purchased any dependent on sub-prime mortgages for repayment.
In reviewing its mortgage investments, Arizona did find at least one that had a few mortgages that didn’t meet standards for higher-graded investment products, Martin said. Those short-term investments haven’t been renewed, he said.
Also, the Treasurer’s Office started reducing its mortgage-related investments in mid-2006 when Chief Investment Officer Tim White, whom Martin promoted to that position earlier this year, realized that the housing bubble was going to burst, Martin said.
Tom Bellshe, deputy director of the League of Arizona Cities and Towns, expressed confidence in the Arizona investment pool’s status.
“We won’t have the same kind of problems,” said Bellshe. “We feel good about the direction he’s taking us in.”
Arizona law requires the state to take a more conservative approach on investing than some other states and Martin has reviewed and tightened investment practices even further since he took office, Bellshe said.
Of the $12 billion in Arizona’s investment fund, $5.5 billion belongs to the state, $4 billion to local governments and $2.5 billion to the state land trust. Arizona’s public employees’ retirement system has a separate investment fund.
A Montana budget official told lawmakers in that state on Thursday that local governments and school districts this week pulled 27 percent of the $896 million that they had in the state’s short term investment pool.
Also Thursday, a Florida board chaired by Florida Gov. Charlie Christ suspended withdrawals to halt a run which saw local governments pull 40 percent of the assets from a state-operated investment pool.
“As you know, many of these investments are now non-performing and incurring losses for investors,” Martin said Friday in a letter to Arizona investors. “Because we avoided these products, we will not experience any losses associated with them.”
Since word of the two other state’s problems has come out, only two calls have come in from Arizona local government officials “who were just double-checking,” Martin said in an interview. “No panicked phone calls or anybody making major changes.”
By PAUL DAVENPORT, Associated Press Writer
Information from: http://www.aztreasury.gov/media/2007/BusinessWeek-11-07.html Business Week
Arizona State Treasurer Dean Martin Says State Budget Is a Wreck
Written on November 23rd, 2009
As work on the overdue state budget hit a new snag Monday, state Treasuruer Dean Martin said it may be too late for a meaningful solution.
Martin compared the state’s budget problems with frostbite.
“At this point, we’re talking about how much of the leg are you going to lose. They’ve missed the opportunity just to lose a toe or two,” Martin told News/Radio 92-3 KTAR’s Jay Lawrence on Sunday.
Martin said it’s hard to place the blame for the budget crisis on just one person.
“I heard a joke the other day. They said (former Gov. Janet) Napolitano and the Legislature drove the budget off into the ditch and the next governor drove the tow truck into the same ditch.”
Right now, the state has had to borrow $700 million just to pay the bills.
The Senate put off its floor session Monday morning as Republicans tried to win Democrat votes for two bills reducing spending for K-12 schools and social services provided by the Department of Economic Security.
Senate Minority Leader Jorge Garcia said the talks concern a Democratic senator’s desire to give Indian reservation school districts leeway to use federal impact aid money to backfill state funding reductions.
Senate Republicans who tried to pass the package without any Democratic votes came up short on Thursday.
The package would close about a quarter of the state’s projected $2 billion shortfall for the fiscal year that began July 1.
Arizona’s Budget Stumped
Written on November 19th, 2009
EARLIER this year Republicans seemed to be in the ascendant in Arizona, the state of Barry Goldwater, even as they struggled in much of the country. Not only had they retained control in both houses of the state legislature, but a fluke turned a Democratic governor into a Republican one when Janet Napolitano, who became Barack Obama’s homeland-security secretary, vacated the office for Janice Brewer, who was secretary of state at the time. But Arizona’s Republicans instead descended into a bitter feud that is bankrupting their state and amusing not even Democrats.
Arizona is among the states worst hit by the recession, and years of tax cuts combined with more spending under Ms Napolitano had left its budget out of balance when Mrs Brewer took over. “By her tenth day in office, she had cut more than any Arizona governor in history,” boasts her spokesman. In March Mrs Brewer went before the legislature to ask for a temporary one-cent increase in the state sales tax alongside yet more cuts. The Republicans balked.
Thus began an increasingly silly feud between governor and legislature. Legislators delayed sending a budget to Mrs Brewer, who in turn sued the body and won. Sulking over her fellow Republicans’ refusal to back her sales-tax increase, Mrs Brewer vetoed large parts of a new budget. As paper and invective flowed between floors of the same building, the hole in the budget opened wider. An (unconstitutional) deficit was carried over from the fiscal year that ended in June to make the hole in the current one even bigger.
Related material Lexington: Republicans, riven but resurgent Nov 5th 2009State budgets in crisis: Happy new year Jul 2nd 2009Soaring gun sales in Arizona: Planning for the worst Jun 4th 2009
Dean Martin, the state treasurer, also a Republican, says that revenues are coming in far below even his pessimistic estimates. Arizona has lost jobs faster than any state but Michigan, mainly as a result of a collapse in the construction business. As a result, he says, the budget now has a hole of more than $2 billion. The state has run out of cash, so he is preparing to issue IOUs to keep paying the bills.
Under pressure to renew negotiations, Mrs Brewer has now replaced her chief of staff, considered toxic by Republicans in the legislature, with Eileen Klein, formerly her adviser on finance matters, who is tough but persuasive. Still, says Mr Martin, there is as yet no plan proposed by anybody that would balance Arizona’s budget in full.
Reprint from 11/12/2009
Arizona State Treasurer Dean Martin Urges Legislature and Governor to Move Forward on State Money Issues
Written on November 13th, 2009
“Anything to help out in these tough times would be greatly appreciate,” said DePhillips, who attended the second annual Financial and Benefits Fair, sponsored by the Sun City West Investment Club, at Palm Ridge Recreation Center. The fair featured several financial firms, which set up exhibits and provided information to residents looking for ideas to combat the flagging economy.
Exhibitors included Fidelity Investments, Morgan Wealth, Reverse Mortgage of America, Edward Jones, JP Morgan Chase Bank, H&R Block and others.
The firms also offered several workshops on such topics as “Out smarting Investment Fraud,” “What to do with Life Insurance” and “Investing in a Volatile Market.”
“It’s always important for retired seniors to be careful with what we do with our money,” said Ken Foley, president of the investment club. “This fair helps and gives you a variety of approaches to help with your investments.”
Joan Haugan and her husband, Gene, said the fair couldn’t have come at a better time.
“I think we all need help right now, and what better way to do that than by getting advice straight from the horse’s mouth,” Haugan said.
Arizona State Treasurer Dean Martin unveiled a new guide “50 Ways to Stay Financially Fit Beyond 50″ at the fair.
“This is a chance for seniors to have tips and advice on getting through these rough times,” Martin said.
Among the 50 tips offered in the guide are:
• Make no mistakes. Check your credit report so you can spot any errors before creditors or others do.
• Keep a secret. Keep your PIN number out of sight. Martin said seniors frequently write the number on the back of a bank card.
• Get secure. Use a random number for your PIN and if you have to write it down disguise it as a phone number.
• Be prepared. Make plans to pay your bills should you have to spend time in the hospital for a few weeks. Make sure someone you trust knows where this information is.
• Emergency fund. Have savings that can get you through three to six months should that become necessary.
Martin also discussed the overall economic condition of the state and nation.
“It’s going to take time to get out of the state that we’re in, and it just won’t happen overnight,” he said.