Senator John Wightman
The voters of Nebraska will be voting on Constitutional Amendment 1 on May 13. The amendment would authorize governmental entities, including cities, to invest part of public trust funds in stock and mutual funds in addition to insured certificates of deposit and other insured fixed investments.
Over almost any 10-year period, the average return on these investments has been approximately 9 percent compounded annually compared with about 5 percent on fixed investments.
Public trust funds result from gifts and grants to cities by individuals, corporations or foundations. It is important that the returns be maximized, if the gift is to realize the donor’s intended purpose.
For example, if a $100,000 gift were invested in a 5-percent fixed investment for 10 years and the interest be allowed to compound, the fund would grow to approximately $163,000 in 10 years. If the same fund grew at a 9-percent compounded rate, the fund would be worth approximately $237,000 at the end of 10 years. The actual return for the 10 years would be more than double.
However, a reasonable investor would be required to invest partially in both fixed investments and equities. Almost all retirement funds are invested in such balanced investments, and public trust funds should be entitled to be invested in this manner as well.
I would encourage you to vote “yes” on Amendment 1.
