LOWNDES COUNTY, Miss. (WCBI) — Less than three months of new investment standards is paying big dividends for Lowndes County taxpayers.
Although final returns aren’t in, the county earned more than $700,000 on its $30 million hospital fund between Oct. 7 and the end of 2013, according to County Administrator Ralph Billingsley. That compared to only about $50,000 in all of 2012 when the county was forced to invest under old state laws that basically limited investments to certificates of deposit which were paying less than 1 percent interest.
The $30 million is from the sale of the county-owned hospital five years ago to Baptist Health Services.
State lawmakers gave county supervisors more flexibility last year while still guarding against risky investments and raiding the trust fund. The new rules limit investments to 40 percent equity funds, such as stocks, and 60 percent fixed income devices.
The dramatic rise in the stock market last fall fueled Lowndes County’s earnings.
The county hired two consultants for guidance and the new rules started in early October.
County leaders say the rules protect taxpayers but also allow the county to plan for new major capital needs.
The county, along with Lafayette County which sold its hospital to Baptist in 2012 for $60 million, are asking the Legislature to put other limits on spending the money which allows them to build the nest egg while still spending some of the earnings on capital projects.
The new rules would allow the local governments to spend up to 3 percent of returns. So, if the county makes 5 percent in a year, it could only spent up to a 3 percent return. The rule is designed to smooth out ups and downs in the markets while allowing financial planning by local governments while protecting taxpayers.
The county will get a full update from its consultants at a Feb. 14 meeting.
Supervisors have not yet had any discussions about a capital improvement plan financed by the increased revenues and most say they’d like to see a long-term trend before finalizing any details. Some ideas that have been tossed out include an ag center for cattle and horse shows and other events.