BOISE – Chris Anton, manager of investments for the Idaho Endowment Fund Investment Board, told the state Land Board that despite the economic turmoil caused by the COVID-19 pandemic, challenges in relations with China and the social unrest across the country in the wake of the death of George Floyd, financial markets have been “remarkably resilient.” That’s been driven in part, he said, by “optimism that the future is brighter than we’ve seen over the last few months.”
“This morning, (there was) a very strong retail sales report that came out,” Anton told the board on Tuesday. “As people are looking forward, they see the economy coming back and they see the strength.”
The Endowment Fund Investment Board oversees the investment of the state’s permanent endowment fund in the stock market and other investments; earnings go to the endowment’s beneficiaries, the largest of which is the state’s K-12 public schools. “In May, our portfolio was up 4.5%,” Anton reported. “That left us up 2.7% for the fiscal year to date,” which closes June 30. “Through yesterday, we were up 3.9%.”
“But it’s been quite a ride,” he noted.
At its high point on Feb. 19, Idaho’s state endowment fund was up 9.8% for the fiscal year. As the pandemic forced the economic shutdown of much of the country, it dropped by 18.5% on March 23.
“About a week ago, we were actually up 7.6%,” Anton said. “So we’re almost back up to the high for the fiscal year. We’ve had some volatility the last few days.”
Some days, he said, fears about a second wave of COVID-19 infections have impacted the financial markets.
“Other days, we get good economic news and the market rebounds,” he said. “But overall, we’ve just seen this huge dip and a significant recovery, which has just left us in a pretty good place going into the (new) fiscal year,” which starts July 1.
Reserves are at close to 5.9 years’ worth of distributions for public schools and 6.5 to 8.4 years’ for the other endowments, which include funds benefiting universities, prisons and other state institutions. The beneficiaries receive multimillion-dollar distributions each year from the reserve funds, depending on earnings.
Anton noted, “If our return is above inflation, the return above inflation gets moved from the permanent fund into reserve funds, which will push the reserve up even farther. … We’re a fair amount above inflation. So unless we see significant drop-off the last two weeks of the fiscal year, we will be fully reserved at the end of the fiscal year.”
Gov. Brad Little, who chairs the Land Board, told Anton, “All green, all good. Just keep ’er green. You’re doing good.” He added, “You like this volatility?”
Amid a murmur of laughter, Anton responded, “No, I don’t.”
The endowment’s current value is more than $2.3 billion; the last distribution to beneficiaries, approved unanimously in August 2019 by the Land Board, was a record $84.5 million, including $52.5 million for public schools.
Under pressure, land board backs off McCall area redevelopment plans
At a public hearing last week, state Land Board members and citizens testified they love McCall.
The protestations came amid a controversial proposal to lease or exchange state endowment-owned property in the area, including carving up 14-acre Cougar Island in Big Payette Lake into five residential lots; the island’s always had just one residence, and local zoning allows only one per 10 acres.
“How can the board sell land for development, the very design of which will be likely to have harmful effects” on the lake and environment, asked former Boise City Councilman Alan Shealy, who is the son-in-law of the late Peter Johnson, the former CEO of Trus Joist and Bonneville Power Administration head who initiated the Payette Lake Water Quality Council and helped write the state laws that protect the lake.
The Land Board voted unanimously to suspend any action on new types of leasing or disposal of land in the McCall area until a full study can recommend uses of endowment land in the area, and presented to and approved by the board.
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