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State Pension Funds to be Invested in State Job Creation in Florida
PSN on June 5, 2008 - 8:35am
Florida Governor Charlie Crist recently signed an economic stimulus plan for the state that redirects $1.95 billion of the state's pension fund into direct investments in Florida's economy. The amount is limited to 1.5 percent of the state's pension money, but even that limited percentage can add up to massive investments in jobs for the state's residents.
In creating the program, legislators and the Governor pointed to the success of similar programs in other states, particularly the California Public Employees' Retirement System (CalPERS), the nation's largest pension fund. A recent study found the California fund's in-state investments had fed an estimated $15.1 billion into in-state economic activity in 2006 and created 124,000 jobs, more jobs than the construction or motion picture industries.
One key goal in Florida is to capitalize on scientific breakthroughs at state universities through funding start ups that can commercialize the research and bring in matching private venture capital to further expand dollars invested in-state.
California is just one of a number of states that are collectively directing billions of dollars into targeted investments in local start ups and job creation. Other examples include:
- Washington State holds $1.4 billion in Washington-based investments, using the money to leverage additional capital from other sources to invest in the state.
- New York's In-state Investment Program recently added new capital to its program, having invested $271.4 million in 107 New York state companies as of 2007, to a total of $836 million.
- The New Jersey Division of Investment recently announced the New Jersey Directed Investment Fund, which will join pension fund investment with private-equity partners to support New Jersey-based firms and companies willing to expand state operations.
Florida is joining an increasing trend of states that are no longer willing to be at the mercy of global financial firms -- or pay out massive tax subsidies often with few returns -- but who are instead using their own pension fund capital to directly invest in the economic future of their states.