Idaho got its best interest rate ever this year on its annual sale of tax anticipation notes, which the state uses to manage its cash flow throughout the year. This year’s sale of $475 million in notes, completed last month, brought an interest rate of just .11 basis points, or 11/100ths of a percentage point. “That’s virtually free money,” said state Treasurer Ron Crane. Last year’s rate, which set the previous record low, was .19 basis points. Crane said the state drew orders from buyers who wanted $3.1 billion in Idaho’s notes when it only had $475 million to sell. “So we bumped the interest rate down to 11, and the buyers all held.”
He estimated the savings to the state’s taxpayers compared to last year’s costs at nearly $400,000; each basis point in interest costs $47,500. “Idaho paper is extremely valuable in the marketplace, because investors know they will get paid back,” Crane said. “This is because we have a track record of managing our finances well.”
Crane’s annual trip to the financial markets in New York for the sale, which typically includes a bevy of state officials, made headlines in 2011 amid reports that the Idaho group traveled in 10-person stretch limos in the Big Apple. Crane defended the practice, saying it was the most efficient way of transporting the group in the city and it was also what his predecessors had done, but he’s discontinued it; Idaho’s delegation to the New York financial markets now travels in SUV’s from a car service.