Editor's Note: This version corrects errors in the previous version dealing with the name of the program, the amount of money available for the program and the tax implications of the program.
A program that allows Arkansas residents to put away money to cover the costs of higher education was one of the subjects discussed during the Aug. 22 meeting of the Pine Bluff Kiwanis Club.
“I’m passionate about AR (Arkansas) 529,” said Dennis Milligan, treasurer of the State of Arkansas.
The program, administered through Milligan’s office, lets residents invest money, which is tax-deferred, into an investment plan that can be used for any eligible public or private college or university or trade school worldwide.
Milligan, who will complete his first term in office at the end of December, said when he took office, there was $281 million in the fund, which now totals more than $800 million.
“The money follows the child,” Milligan said, adding that married couples can contribute up to $10,000 annually while single people can contribute up to $5,000.
“You can take that off your gross income and you can withdraw the money without a penalty on the interest so you’re not getting stuck,” he said, adding that residents can start the plan with a minimum $25 investment and contributions of $10 a month.
A Republican, Milligan took office in January 2015 and said he came from the private sector where “If you don’t make a profit and don’t pay your employees you can’t stay in business.”
He said he was told that you can’t run government like a business but believed that for every dollar the state could earn through investments, there would be one less dollar needed from taxes.
That has produced $195 million that has come back to the state in interest income, and to generate that money, he said the office turned from being passive to being aggressive and managing a $3.6 billion portfolio.
“We put the right people in place,” Milligan said. “I don’t make on the fly decisions. There’s a state board of finance headed by the governor so there’s close control.”
He said when he ran for office, he promised transparency, explaining that his predecessor, Martha Shoffner, spent 22 months in federal prison after being convicted of political corruption, accepting bribes in a pie box.
“We don’t get pies delivered in boxes,” he joked, adding that Arkansas residents can check the office website, artreasury.gov, where they will find a list of every investment the state has made, the amount of interest being paid and the maturity date.
Milligan is seeking his second and final term in the November General Election and will take on Libertarian Ashley Ewalt.