State Treasurer John N. Kennedy said Thursday the Louisiana Education Quality Trust Fund had its best year ever, growing by nearly $108 million during the 2012-13 fiscal year.
The money comes from a 1986 federal oil and gas settlement that allows Louisiana and other coastal oil-producing states to share in revenues produced in federal offshore water. Investments gains made from money in the fund are used to aid K-12 and higher education.
Government insiders call the dollars “8g” money, a name that stems from the amendment to federal law that set up the fund. The money is also known as the Board of Regents Support Fund, after the group that oversees the state’s public colleges and universities.
Speaking at a joint meeting between the Regents and the Board of Elementary and Secondary Education, which oversees grades K through 12 in the state’s public schools, Kennedy said the fund has grown from the $540 million originally invested in 1986 to $1.2 billion today.
More than $1.48 billion in 8g funding has been distributed among state agencies since 1987, he said.
The state Treasury’s chief investment officer, John Broussard, broke down the 2012-13 gains this way:
- $38.7 million in investment income.
- $46.1 million in capital gains.
- $22.9 million in royalty income.
Broussard said this year’s allocation to K-12 and higher education is about $50 million.
Kennedy also reported “explosive growth” in the state’s college savings program. He reported the fund has grown from about $2 million in 1999 to around $460 million today.
The Student Tuition Assistance and Revenue Trust, or START, is a state-sponsored trust fund that allows parents to put money away with the benefit of having the state match those dollars.
The state matches between 2 percent and 14 percent of all deposits based on the adjusted gross income of the account owner. Account owners can choose the level of risk for the funds they invest, ranging from a secure interest rate to stock market funds. All investments are managed by the state treasurer.
A report from Legislative Auditor Daryl Purpera’s Office shows that the program, administered by the Louisiana Office of Student Financial Assistance, is in good financial health.
The report further said more and more people are taking advantage of the program with “significant growth” coming last year.
The number of accounts increased from just over 32,000 five years ago to 45,182 active accounts today, including 3,272 new accounts opened between 2011 and 2012, the report said.
Gov. Bobby Jindal’s financial disclosure reports show the governor as an active participant in the program routinely contributing money to accounts opened on behalf of his three children, Selia, Shaan and Slade.
Visit http://www.startsaving.la.gov/savings/index.jsp for more information about the START program.