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Andy Nakahata (
I now have the honor of introducing our keynote speaker, California straight treasurer, Fiona ma treasure ma is the 34th treasurer of the state of California. She is smart, accomplished and often quite funny. I know that many of you were here to hear her Biore earlier today. So rather than reading the bio, which I think everyone is heard too many times, I did a little online sleuthing last night, Fiona and I thought I would share a week in the life of the treasurer of the state of California. So items for the last week attended the lake county fair participated in a panel discussion about new bills, initiative, grants and loan programs to help people buy homes and build equity visited, amazing looking public murals in west LA, sold on the side, sold about 2.3 billion in state of California, geo bonds discovered a great dpling place which I really wanna hear more about attended an event in Los Angeles for the academy of motion picture in arts.
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And I am wondering and in her post, if she got to meet Michelle Yeoh, because that would be very exciting for me. She weathered a hundred degree heat while attending the gold county fair in Auburn which had the theme where no fair has gone before. And she found gold, the plaster county muse which was located in the courthouse. And I am hopefully you took the vault, the gold and put it in the state vault and last but not least, you celebrated Korean Thur Thanksgiving, for the fourth annual Trusock festival in San Francisco. So I tell you all this not to know, not for you just to know that Fiona is clearly tireless and has boundless energy. But you look at where she is been and what she is done for the last week. And not only does Fiona work hard, but she has incredible values for community and she loves the state of California. So with that please join me in welcoming Fiona ma
Fiona Ma (
Thank you, Andy. I am very excited because someone is looking at my social media feed and I do all of my own posts on Twitter, Instagram and Facebook. And I love getting around the state because I listen, I learn and I actually see what is happening on the ground when people, all the newspapers have these headlines and what is coming out at, in DC, I just, I look at my local restaurant, are people going out? Okay, well people are going out and spending money. What does that mean about the economy, right versus what we were hearing. So thank you Andy, for the introduction. Thank you, Mike, for your leadership. Thank you, Mark for being a co-chair and it is my pleasure to be here at Bond Buyer's 32nd annual California public finance conference. I am now in my fourth year as a state treasurer and I last spoke to you virtually on October 18th, 2021.
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I am pleased to see you all in person after two years, 11 days etc for this important annual conference that gathers the top experts from across the nation to address the most pressing issues. When it comes to public finance last year when I spoke, it was over a year and a half into the COVID 19 pandemic and I was optimistic and hopeful for the future with a new presidential administration and member, many members of our congressional, California delegation back in Congress, California was ahead of other states with the shelter in place order that saved lives since then the economy has reopened. However, the virus has not gone away. As we had hoped, we are still in the midst of a global pandemic. The virus has undergone several mutations and subsequent variants and the governor and other elected officials have termed this new phase, California smarter.
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And that stands for shots, masks, awareness, readiness, testing education, and the R stands for RX, which is prescriptions regarding California and our general economic outlook. California still remains the fifth largest economy in the world with a GDP of 3.4 trillion. We are the most populous state in the union with more than 39 million residents representing 12% of the us population, people are returning to work and the state is leading the nation in low unemployment levels, but inflation, climate change and housing are some of the ongoing challenges facing our state beginning earlier this year, the federal reserve began raising its target range for the federal funds rate citing high inflation as its primary concern, as inflation is running far above 2%, the fed is indicating it will keep hiking rates despite widespread signs of slowing economic growth. The fed is also continuing its quantitative tightening plan to reduce the size of its balance sheet by letting bonds it holds mature without reinvestment.
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The pace of this initiative will begin to pick up in September as the fed allows more bonds to roll off its balance sheet. So back to California and our state budget for 2022 to 2023, the great news is that the legislature and governor have enacted on time budgets for 12 consecutive years, which has greatly impacted for the positive our credit rating here in California. Our state's budget resilience is strong as it continues. Building reserves, reducing retirement liabilities and focusing on one time spending rather than ongoing investments to maintain structurally balanced budgets over the long term, this year's budget has $37.2 billion in our four rainy day and savings accounts, $37 billion. I am kind of shocked when I think about it and that's thanks to Jerry Brown who really started putting away, money into our savings. The major spending components of the 2022 to 2023 budget include K through 12 education, higher education, health and han services and public safety. The budget also includes a 17.2 billion broad based relief package that provides assistance to millions of Californian families and small businesses facing elevated costs of living and continued economic pressures from the pandemic. The largest component of this package is the better for families tax refund, which is estimated to return 9.5 billion to taxpayers by providing payments to over 17 million families. These payments are expected to roll out in October.
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Since I took office in 2019, my office has served as the agent of sale on approximately 74 billion of bonds for the state state agencies, state financing authorities and universities of that amount over 16 billion was general obligation refunding that refinanced older, higher interest debt. These go refunding bonds will save the state's general fund 5.57 billion over the next 20 years or 4.5 billion on a net present value basis. Just last Thursday, my office completed this sale of 2.3 billion of various purpose general obligation bonds. The sale included 1.28 billion of new money bonds to refinance, sorry, 1.2 billion of new money bonds to finance, a wide variety of voter approved projects and also refunding bonds to refund previously issued geo debt. Earlier this year, my office sold the final $1 billion of a 2 billion authorization for the no place like home program, which was labeled the first social bond in the nation.
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This program funds the permanent supportive housing for people who are experiencing homelessness, chronic homeless, or who are at risk of chronic homelessness and those who are in need of mental health services. My office also invests the state's idle funds as well as the funds of local government entities in our pooled money investment account or Pia as of August 31st, 2022, the P Mia account held approximately 198 billion of state monies and 31 billion in local governments. It's about 2300 local government entities through our LA account. The average life of the investment portfolio of the P Mia as of August 31st was 304 days.
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In addition to my three divisions, cash management investments and public finance. I also chair 13 active boards, commissions and authorities. One exciting reauthorization by the federal government will help small business recover more quickly. I know that Sheila Tobias Daniels is here who heads our CP CFA. And we are expecting 1.1 billion on September 15th that will provide loan loss reserves and loan loss guarantees to participating lenders so that small businesses can get additional assistance post pandemic, especially for minority owned businesses and businesses located in low income communities. And this is through the state small business credited credit initiative or the SS B C I program. In addition to the board's commission's authorities, I chair, I also serve on the boards of CalPERS and Calsters the two largest pension funds in the United States at our last August 31st meeting, the Calsters board approved the total fund plan, a package of investment actions to achieve a net zero investment portfolio, address climate change and support the retirement security of California's public teachers. The board set four initial measures for integrating the net zero strategy across the portfolio with a specific focus on emissions reductions. The board also took a significant step in advancing its pledge from last smer to achieve a net zero emissions portfolio by 2050 or sooner.
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Although California is on the road to recovery and Californians are returning to work many, still find themselves UNB overburdened with high housing costs and high rent with limited rent relief while trying to save for the future. Part of my role in responsibilities as a state treasurer is to serve as the chair of three savings programs, scholar share 5 29 Cal savers and Cal Abel. Although president Biden recently announced significant student loan relief in August. I cannot stress enough the importance of saving for college or career training and avoiding and or keeping high student loan debt low at the bond buyer conference. Last year, I shared information from last year's budget titled California's comeback plan with monies to fund college savings accounts last month, governor Newsom and I officially unveiled the California kids investment and development savings program. Acronym is Cal kids administered by the scholar share investment board.
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Cal kids is the largest children's account program in the nation through a 1.9 billion investment in savings accounts for low eligible, low income school-aged students and eligible newborns. All babies born in California on or after July 1st of this year will receive up to a hundred dollars in a Cal kids college savings account in that child's name, additionally eligible, low income public school students in grades one through 12 may receive up to $1,500 in college savings for their future. In addition, there is an important bill on the governor's desk right now, SB 1374, which we sponsored that will give a tax deduction for contributions to a scholar share 5 29 account. The limits will be for single taxpayers up to 100,000 in income will be able to contribute and deduct up to $1,000 off their tax return per beneficiary, married individuals up to 200,000 in household income will be able to deduct $2,000 per beneficiary on their tax returns.
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So we are hoping that this will incentivize more individuals to put more money into scholarship 5 29, which I chair. I also chair the Cal saver's retirement savings board that oversees the state's retirement savings program designed for millions of Californians who are not offered a retirement savings account through their job. The program enables employers including nonprofits and sole proprietors to provide their employees with access to a payroll deduction, individual retirement account with no employer fees. This program was created by legislation in 2016, requiring California employees, sorry, California employers who do not sponsor a retirement plan and have five or more employees to participate in Cal savers on August 31st, governor Newsom signed an expansion bill authored by Senator Cortese that will expand the program to employers with at least one employee. And I believe that will be effective starting in 2025 on the federal level, there was a bill making its way through Congress called the able age adjustment act able stands for achieving a better life experience and is a savings investment program designed for people with a disability that occurred before the age of 26 years old.
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If passed this bill would expand the program to include individuals that incurred a disability before the age of 46 as chair of the able committee for the national association of state treasures. I and my counterparts in other states are advocating for its passage, which would include disabled veterans who would greatly benefit from this program. Cal label was launched in 2018 and has now grown to 8,000 accounts with nearly 80 million of assets under management. Our cal able program has become the fastest growing, able program in the United States. Lastly, my future goals remain the same as I have set forth in the beginning of my term. And that is to provide, produce and develop more affordable housing that meets the needs of all Californians. I have a key role in housing finance as the chair of the tax credit allocation committee and the California debt limit allocation committee that allocates the bonds and the tax credits that subsidizes affordable housing.
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I am also a voting member of the California housing finance agency, which also finances affordable housing during my keynote earlier at the pre-conference I spoke extensively about the report my office released with California forward titled California dream for all. This is a proposed, shared appreciation, revolving loan investment fund for the state of California. This year's state budget allocated $500 million in seed capital to start this program that will be administered by the California housing finance authority. We believe this program will provide value for both the state and first time home buyers and help make the wealth of home ownership attainable for more Californians. So to conclude as state treasurer, I am not only your state banker, but also a reformer who believes in exercising best practices in banking, borrowing and investing taxpayer funds. I will continue to safeguard the state's finances, invest idle funds, continue to issue bonds and efficiently manage our tax credits, bonds and other important programs such as our savings programs that many Californians depend on on a daily basis.
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We have been trying to be creative and think outside the box and pivot as quickly as possible as circstances warrant. I am always open to your ideas and I am accessible to engaging in more of these fruitful discussions. I thank all of you for doing your part during the pandemic to keep each other safe, to lift each other up and now post pandemic. All you are doing to keep California the great state that it is and the fifth largest economy in the world. Thank you very much. And I hope you all have a great conference. Thank you.