Union County started 2024 strong with more than a million dollars in investment income revenue.
Treasurer Andrew Smarra, who serves on the county’s investment committee, told the commissioners Wednesday that the county earned $1.5 million in interest income revenue for the first quarter of 2024, up from $833,000 the same time last year.
“Quarter to quarter, not a whole lot has changed,” he said. “That’s the good news. I don’t have a lot of bad news.”
Interest is generated from money the county has invested in various funds from corporate bonds to commercial paper. Smarra said, on average, the county has about $100 million invested, that’s worked out to about $4.5-5 million in interest generated in a year.
The total investments and deposits on hand as of the end of March amounted to $169,157,415.59, according to the investment advisory committee report.
Smarra said the county has the Federal Reserve to thank for the continued growth in investment interest, as rates remain higher than in the past.
“It allowed us to position ourselves to be able to take advantage of rising interest rates and our overall portfolio. The losers we had are slowly kind of working off and we’re able to reinvest that money in higher rates,” he said.
Smarra said he doesn’t anticipate there will be much change at the federal level this year to change rates but if it happens, it would likely be in the third quarter so that it would be done ahead of the presidential election in November.
He said based on the indicators, there’s not really a reason to lower rates anyway, given that they are both positive.
“They have two mandates: one is inflation and the other is full employment. Both indicators would say don’t lower rates,” Smarra said. “I know the market wants lower rates but the market is not one of their mandates.”
He said that’s positive from the county’s perspective because that will allow them to reinvest funds as they mature at relatively higher rates.
As has been the case for the last year or more, Smarra said the local economy, both the county and the region, are doing well.
While the state economy may be so-so, he said central Ohio is likely propping it up.
“And we’re right there in the thick of things because we’re all of 30 miles from the Statehouse,” he said. “So we should expect here in Union County to continue to see strong growth in terms of housing, in terms of demand, in terms of retail demand.”
The county government is driven by sales tax and property tax revenue. Assuming the county continues to grow, more people will likely lead to more retail establishments and an expansion of the property tax base which will, in theory, lead to more sales and property tax revenue, Smarra said. But the investment money is positive because it’s not coming from residents.
“This is money that is coming into the county, not out of the taxpayers pockets,” he added. “And that’s always a good thing.”
The commissioners said they appreciate the work the treasurer puts in and considers the county “fortunate” to be in that position.
Commissioner Dave Burke said knowing this money is there allows the county to counter rising costs in other areas, such as a recent increase of 9% in county property and liability insurance as well as a 12% increase in costs at Tri-County Regional Jail, which the commissioners contribute to funding.
“I just thank you again for the work you’re doing that adds to decreasing the tax burden on the citizens,” he said. “A million dollars here and a million dollars there, now you’re talking about real savings for our citizens.”
He added that with sales tax slowing and consumer spending waning, which coupled with costs going up, the county is in a good position to not have to make tough decisions but focus on the future.