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Amendment A looks to increase investment options

by Wyoming Livestock Roundup

As Wyomingites begin to fill out their absentee ballots or prepare to visit their polling place on Election Day, the Wyoming Secretary of State’s office notes that they will see a constitutional amendment on the ballot. Wyoming State Treasurer Mark Gordon adds the measure would be helpful to support the state.

Amendment A, if passed by voters, would give the Legislature the opportunity to allow some of the Wyoming’s non-permanent funds to hold other investments than just bonds, which could  increase returns from invested monies.

Funding sources

Gordon comments that it is important to distinguish that retirement funds and permanent funds are not part of the funds included in Amendment A.

“These funds were given the constitutional authority to invest in equities by the voters in the 1990,” he says. “They have been doing it for some time.”

“Wyoming’s portfolio is about $19.8 billion, and that gives off typically anywhere from $1,300 to $1,700 in tax savings for every Wyoming citizen,” Gordon explains.

Permanent funds make up approximately two-thirds of Wyoming’s total portfolio, and each fund has specific purposes, explains Gordon.  The other third is a pool of funds is called the State Agency Pool.

“In the State Agency Pool, there are more than 300 different component funds, so they run everything from boards to agency budgets and appropriations, clear up to the Legislative Stability Reserve Account (LSRA), or the rainy day fund,” Gordon comments. “There are also a number of trust funds, like the Wyoming Wildlife and Natural Resource Trust, which funds weed and pest control among other things, the Cultural Resources Trust and others.”

The State Agency pool is the set of monies that cannot currently be invested in equities. Amendment A would target only those funds.

“We did a very quick and dirty study that looked at the returns from the permanent Mineral Trust a year ago,” Gordon continues. “We looked at the earnings, and it was right around six percent over the long haul. We compared that to the State Agency Pool, which earned right around two percent for the same time interval.”


If the constitutional amendment is passed, Gordon says it does not immediately authorize funds to be invested in riskier portfolios.

“This allows the Legislature to take some of those 300 funds in the State Agency Pool that they feel might benefit from some equity and give them some exposure to equities,” he explains. “The Legislature has to be really convinced of this decision. For those funds to be invested differently, they have to pass two-thirds of the House and two-thirds of the Senate, which is a high bar.”

He continues, “If they do pass it, then the State Loan and Investment Board (SLIB) will set an asset allocation, and we’ll move forward.”


Over the last month, Gordon has traveled across the state of Wyoming, visiting with constituents about Amendment A. During that time, he has heard several recurring concerns from citizens.

“One of the concerns that people often ask about is, what if we have a crazy Treasurer? Can they cause problems?” Gordon says. “It is unlikely because everything the state does with its investment program  is a very considered process. It is the SLIB that selects the investment managers, sets the allocations and policies which guide the investment process.  To do that, by law, the SLIB retains a qualified investment advisor, and they have to review the entire portfolio on a quarterly basis.”

The investment advisor, RBK out of Portland, Ore., provides advice on asset allocation for funds that are invested.

“We won’t invest 100 percent in stocks,” Gordon adds. “It would be a measured approach appropriate to the specific fund with something more like at 60-40 split.”

When looking at an acceptable level of risk, Gordon notes that a number of parties come together to determine what an appropriate investment is for the state.

“SLIB, the Treasurer and the investment consultant work together to determine risk,” Gordon continues. “Over the top of that, the Select Committee on Capital Finance meets annual to look at what we’re doing.”

Gordon emphasizes that the checks and balances are in place to protect against abuses.

Another concern from Wyomingites is the risk of the stock market.

“The stock market does have risks, and there is no question in that,” says Gordon. “The bond market also has risks, and being diversified allows us to be more prudent and more defensive in asset allocation, which will ultimately help us do a better job in Wyoming.”


Another concern from citizens of the state is the liquidity of the account.

“Some people are worried a little about the liquidity of the account and the ability of the state to manage cash and meet our obligations,” Gordon explains. “The answer to that is that we must continue to do a very careful job of cash management and cash forecasting.”

In investing, he continues that the state will maintain an adequate buffer to ensure that the state remains liquid and able to meet obligations.

“A blend of assets helps us to maintain our liquidity, as well,” he says.

Calculated risks

Moving forward, Gordon adds that any changes in investment strategies for the state’s money will not be sudden.

“We’re looking for the opportunities available,” he says. “Right now, the stock market is valued high. Looking back at 2008, if we would have had the opportunity to invest in stocks after the recession, we could have seen substantially greater returns to the state.”

He continues that the state would not be investing all of the State Agency Pool funds in the stock market.

“We are looking at funds the could benefit from some exposure to stocks which might be around about one-third of the State Agency Pool,” he says. “The Legislature will put parameters on it. We’re only talking about a small portion of the $6 billion, and even then, the specific funds would have a blend of stocks and bonds.  Nothing would be 100 percent invested in stocks.”

Gordon notes, “There are a lot of checks and balances, and we want to protect our savings and optimize our earnings where we can.”

Saige Albert is managing editor of the Wyoming Livestock Roundup. Send comments on this article to

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