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Cash management study underway for state government in North Dakota

A “cash management” study is underway in North Dakota’s state government.

The study is something Gov. Burgum has been pushing for.

The study will look at the state’s various trust funds and state government coffers, or "cream cans," as Burgum described them.

Burgum said when interest rates were low, how the cash was managed probably didn’t matter as much.

"But during a period of high interest rates, having that amount of cash could mean tens of millions of dollars of missed opportunity," Burgum said.

Burgum said in a traditional family, if it has savings, it doesn't keep all of the money in a traditional checking account.

"You move some of it into a money market fund, or a savings account, where you get higher returns," Burgum said. "That's basically the same principal here."

Burgum said too often, there is too much in state checking accounts, and not enough in an interest-bearing savings account.

"It may be three months, six months, nine months in the savings account, until we need the cash," Burgum said. "But it should be in a place to get the highest possible return."

Burgum said that could lead to more money being available for the state budget – as well as for tax relief. He also said this should help the state’s bond rating.

"When the bon raters look at us, and at our cash management, and the cash is stuck in those checking accounts, and at the end of the Legislative session, we balance the budget by transferring money from those accounts into the budget, it appears that somehow we're making the transfer to balance the budget, when if we had more of that money just flowing into the state's General Fund, it would be the actual fact that we have more revenue than we have expenses," Burgum said. "But the bond rating agencies don't actually see that."

Burgum said a better bond rating would be advantageous, if the state and local governments would need to borrow money.

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