Last year state Treasurer Duane Davidson reduced the treasury service fee from 0.32 percent to 0.25 percent. Now, to help the state during the downturn, he has reduced the fee to 0.2 percent. Together, the reductions are expected to save state agencies $13 million. The treasurer “stated that he would consider lowering the fee even further if the right economic conditions occur that could support such action.”

The state treasurer may charge up to 1 percent of daily cash balances from certain earnings (RCW 43.08.190). As the treasurer’s office explained in August, a fee reduction “allows more money to be deposited to each recipient fund, resulting in additional cash available for the programs that the legislature establishes within each fund.”

The fee is used by the treasurer’s office “to pay for investment expertise, staff and general business operations.” According to the treasurer’s office, the fee was set at 0.5 percent in 1991. Then, during the Great Recession, it was reduced to 0.32 percent “to free up additional cash in budgets and give agencies more flexibility.”

The fees are deposited in the state treasurer’s service account. Notably, in response to the Great Recession, transfers from this account to the general fund totaled $98.7 million—the sixth highest source of transfer funds. (See here for more on transfers made during the Great Recession.) Even after the recession, the Legislature has continued to make transfers from the state treasurer’s service account to the general fund–state (GFS). For example, the 2017–19 budget transferred $12 million and the 2019–21 budget transferred $16 million from the account to the GFS.