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Local governments hope to gain liquidity, some extra money in interest
By Eric Berman
1/30/2008

The state opens a new investment pool Friday in hopes of helping local governments squeeze out some extra drops of black ink.

County treasurers and other local finance officials can only invest funds in U.S. Treasury securities and the same kind of bank accounts you can. The state can invest in corporate bonds, a difference that can be worth two-thirds of a percent extra in interest.

That's a gain of about $7,000 on every million. But Dave Holt with Indy's Warren Township Schools says even that much can be critical, allowing the district to buy supplies or pay part of a teacher's salary. And because the state fund will be more liquid than a bank CD, Holt says it'll be easier to manage cash flow.

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