The state of Mississippi is on a strong financial footing with a solid credit rating, a healthy bond situation and a rainy day fund at it statutory max, State Treasurer David McRae told Meridian business leaders Thursday.

McRae, who was elected to his second term in office last year, was this year’s keynote speaker at the East Mississippi Business Development Corporation’s annual summit. Financially, he said, Mississippi is doing quite well.

“The bond agencies in New York see us as a legitimate economic powerhouse ready to go forward into the future,” he said.

The state treasurer’s office is the smallest office in state government, McRae said, with a total workforce of just 36 people. Despite its size, however, the agency’s impact is felt in every corner of the government. The state treasurer plays a part in everything from paychecks to bond funds, he said, and is vital to keeping the state’s services up and running.

With a global pandemic hitting the state roughly 60 days after he first took office in 2020, McRae said settling into the treasurer role was a bit of an adjustment. His team, however, made it work and was able to accomplish quite a bit in his first term in office.

Among his office’s achievements, he said, was the modernization of the state’s unclaimed property office. Unclaimed property, which include funds such as life insurance payouts, forgotten savings accounts and more, are turned over to the state treasurer after the organization holding them fails to make contact with the proper owner.

Mississippi, in 2020, was still requiring residents fill out paper forms and have the documents notarized to claim funds rightfully belonging to them, McRae said, and that needed to change. Under his watch, he said, the office was able to take the system online, simplifying the claims process for residents statewide. Workers were also able to clear a backlog of more than 15,000 outstanding claims and lower the average time it takes to claim property from multiple weeks to 10 to 14 days.

McRae said his office has returned roughly $500 million to Mississippians, about $3.5 million of which belonged to Lauderdale County residents. The state still has about $400 million in property waiting to be claimed, he said, of which $9 million is for those in Lauderdale County.

The state treasurer’s office was also able to refinance some of the state’s bonds, McRae said, which saved taxpayers around $250 million in interest.

Mississippi’s is on strong financial footing, McRae said, and companies are taking note. Recent economic development projects such as a $10 billion investment from Amazon to build two data centers in central Mississippi and a $2.5 billion aluminum mill near Columbus are just two examples of industries choosing to do business in the Magnolia State.

“Because of our credit, our bonds and our structure that we have in Mississippi is so good, and our rainy day fund and everything is so good, people are interested in Mississippi,” he said. “So don’t let people tell you that Mississippi is being overlooked. We are being constantly looked at and highly considered for what we do.”

One area of state government that is not as attractive is the Public Employee Retirement System, or PERS, which is the state retirement system for most government employees throughout the state. As state treasurer, McRae sits on the 10-member PERS board.

PERS has been a hot topic going into this year’s legislative session as the system’s assets are less than they should be. The pension fund has enough money to cover roughly 60% of its liabilities, with 80% being the recommended level. Legislators are expected to take action to help stabilize PERS and help it remain solvent going forward.

McRae said PERS has two main issues. The first is the system’s current obligations, he said, which the state is obligated to pay. Employees currently paying into PERS are doing so with a contractural agreement that the system will provide a certain level of benefits once they retire, and that will have to happen, he said.

“You will get paid your benefits no matter what,” he said.

The second issue is what benefits PERS will provide for future government employees, McRae said. Government service isn’t known for its competitive salaries, he said, and the attraction of public service jobs has long been the good healthcare and pension that come with the position. Should benefits be reduced for new hires, working for the state of Mississippi may lose some of its appeal.

As legislators work to come up with a solution for PERS, financial institutions are also keeping an eye on the situation, McRae said. While solving the problem likely won’t happen immediately, he said good faith efforts by the state’s leadership will help reassure lenders of the state’s stability and financial health.