The Arizona State Treasurer’s Office manages a balance of almost $14.5 billion in fixed income and equity investments in 25 different investment pools, each with unique statutory investment parameters.  These dollars are comprised of three major sources:

  1. State Taxes, Fees, and other revenues
  2. Local Government Investment Deposits (LGIP)
  3. State Land Permanent Endowment Funds

The State Treasurer determines the amount of state funds not needed for current operating expenses and invests those funds in the following:

Interest-bearing Time Deposits in Arizona Banks
U.S. Treasury & Federal Agency Securities
Repurchase Agreements
Bankers’ Acceptances
Top-rated Commercial Paper
Corporate Notes
Asset-backed Securities
Mortgage-backed Pass-through Securities
Collateralized Mortgage Obligations
Equities (Stocks)


Overall, the Treasurer manages a fixed income portfolio of approximately $9.0 billion and an equity portfolio of approximately $5.5 billion. The portfolio includes approximately 3,000 different issues. The securities range from repurchase agreements and commercial paper to collateralized mortgage obligations and corporate bonds. Maturities range from overnight to thirty years. These securities are spread across approximately 1,300 accounts that comprise the 25 pools under active investment management.

Safety – liquidity – yield

Safety is the Treasurer’s number one priority in the investment of the public’s funds. Staff investment specialists monitor major investment markets and work to maximize the state’s return on investments without compromising safety while maintaining liquidity to meet cash flows.


Among these investments are 13 Permanent Endowment Funds with a fair value balance of $5.5 billion. These funds contain proceeds from sales of land granted to the State of Arizona at statehood by the federal government.

The largest Endowment fund is the Permanent Common School Fund with a fair value balance of $5.1 billion as of February 28, 2017.  The proceeds from this fund are distributed to classrooms across Arizona.  In 1998, under Article 10, Section 7 of the Arizona Constitution, the Endowment’s distribution formula was created based on the 5-year average of annual returns after adjusting for inflation. When this formula resulted in zero distributions in FY 2010, the Treasurer’s office proposed a change to make the distribution 2.5% per year through FY 2021, which was approved by voters in November 2012. Proposition 123, passed by voters in May 2016, added an additional 4.4% to this distribution, for a total of 6.9% per year from FY 2016 through FY 2025 and making permanent the 2.5% per year distribution starting in FY 2026.

In FY 2017 a $290 million distribution will be made to the 13 beneficiaries of the Endowment, with  the Permanent Common School Fund receiving nearly $270 million. This represents a $12.5 million, or 4.5%, increase in total distributions from the previous fiscal year, and a $10.3 million, or 4.0%, increase year-over-year for K-12 students.

local governments

Local Governments may also deposit money with the Treasurer for investment. These funds are invested and pooled in the Local Government Investment Pools (LGIP). These deposits are voluntary, but provide many benefits to the local governments. The Treasurer’s office pools LGIP investments with other funds to provide greater liquidity and greater yield than possible on their own, and the Treasurer’s Office provides this service at a much lower cost than other options.