LEAGUE OF WOMEN VOTERS OF WYOMING
Office of the President
October 31, 2016
The League has developed a “Pro/Con” flyer to provide voter information about the proposed Constitutional Amendment A which will be on the ballots statewide on November 8. We urge voters to review this on our website: www.wyominglwv.org. There have also been some helpful articles in the news: the Laramie Boomerang ran one on Oct. 30, and other news organizations have done similar explanatory articles. The League is still concerned, however, by the many speculative comments we hear which are mistaken and seem to be contributing to a general lack of understanding about what the proposed amendment would do.
Simply put, if the amendment passes, the State Treasurer would be able to ask the Legislature to approve investing up to 10% of the states non-permanent funds (there are some 400 or so, and they fund day-to-day state governmental activities) in stocks or stock funds, rather than in bonds and bond funds only, as is now the case. Approval would require a 2/3 majority vote in both houses, and if the Legislature approved the request, it could also put other conditions on the authorized investments. At present (and for some 20 years) Wyoming’s permanent funds have invested a small part of their capital in securities (stocks or stock funds).
How would the investing work? We spoke with Cynthia Lummis, former Wyoming State Treasurer and currently our US Representative, who explained the process used during her terms as Treasurer. The Treasurer used outside investment consultants, who would invite a selection of the major investment houses in the US to submit proposals for investing the state’s money. From these, a list of 8 possible firms would be selected for telephone interviews, and of these, 4 would be called in for in-person interviews. Once a decision was made, the state would draw up a contract for that firm’s services.
This process was done for each of the many types of investments: large-cap, small-cap, emerging markets, and many more, so the state at any time had up to 17 or so different investment houses each managing a special type of investment. The investment firms were required to meet certain performance goals, and if they failed to meet them for 5 quarters in a row (15 months), they were called in to review their plans. If they failed for 6 quarters their contracts were terminated and the money placed with a different firm. The SLIB (State Loans and Investments Board—all 5 statewide elected officials) reviewed the investment performance regularly as a whole, and the Treasurer monitored it very closely. There is of course no certainty that the current or future State Treasurers would follow the same practices.
The League presents this information not to take any position on the proposed amendment; our goal is to empower each voter to decide either for or against based on a good understanding of the issue, and not because he or she has either not enough information or mistaken information. For more reasons for and against, we urge voters to get in touch with a known investment advisor and ask for more clarification on the difference between stocks and bonds, and types of stocks and bonds and risk versus returns. Lastly, the League urges all eligible Wyoming citizens to register and vote on November 8. It is our government and we should all have a vote counted.
Amy K. Williamson
Pro/Con Flyer >>>