Study committee on Common School Fund to meet on Oct. 11

The Legislative Council Study Committee on the Investment and Use of the School Trust Funds is scheduled to hold its third public meeting on Thursday, October 11 at 10:00 a.m., in Room 411 South, State Capitol.

The Study Committee is directed to review the statutes governing the investment of the trust funds administered by the Board of Commissioners of Public Lands (BCPL), including the loan programs administered by BCPL. The Study Committee is further directed to assess whether current statutes adequately ensure the effective investment and appropriate use of the proceeds of the funds, and recommend legislation for necessary changes.

Some Study Committee members have expressed concerns about the BCPL’s State Trust Fund Loan Program and its effect private lending to municipalities and school districts. Possible discussion topics relating to these concerns include, among others:

o   capping the portion of the school trust funds that the BCPL that may be invested through the loan program;
o   prohibiting the issuance of loans with features that private lenders are unable to offer or requiring that the BCPL serve as a “lender of last resort”; and
o   measures intended to increase the return achieved through the loan program itself.

Other potential discussion topics relate to investment of Common School Fund moneys.  These include:

o   the relative emphasis the BCPL should place on the generating total return versus generating income;
o   how investment expenses should be funded;
o   whether to modify the standard that applies to the investment of these moneys by the State of Wisconsin Investment Board (SWIB) under authority delegated by the BCPL;  and
o   whether to authorize the BCPL to delegate to investment responsibilities to managers other than SWIB.

Additional related topics for potential discussion include whether to codify the BCPL’s current asset allocation policy or distribution targets, with or without modification.  

You can view a memo outlining potential topics for the Study Committee’s discussion in much greater detail as well as the minutes of the Study Committee’s September 5, 2018 meeting on the Study Committee’s webpage.