Kansas Should Strengthen Bonds With Israel
Last week, I requested the introduction of legislation that would give Kansas the option of investing in Israel Bonds. While I have long been a supporter of Israel, as Kansas State Treasurer, my primary responsibility is to put the needs of Kansas first. Moving into the world of foreign investing would be a new endeavor for the state, and Israel Bonds could be an excellent entry point into the marketplace — not to mention the perfect opportunity to both show support for Israel and strengthen a long-time trade relationship with a nation that is flourishing.
Under the proposal, the Kansas Pooled Money Investment Board (PMIB) would be given the option of investing up to 2 percent of the state’s idle funds in Israel Bonds. The goal is not to mandate the board to act, but to give them the option if the investment makes sense for Kansas.
Current law only allows the state’s portfolio managers to invest in securities issued by the United States and its agencies. When looking at long-term investments, Israel Bonds often see a higher yield than US Treasuries, and have never defaulted on interest and principal payments. This kind of investment option should be available to our state, and could certainly be a good thing for Kansas taxpayers.
The Kansas Legislature has already shown its support of Israel through legislation approved in both 2017 and 2018, which requires certain state contractors to confirm that they are not actively engaging in a boycott of Israel. Receiving wide, bipartisan approval, that legislation sent a strong message that our state wants to further its collaboration with Israel. Now is the time to take the next step.
Israel is often featured on the nightly news with a focus on some geo-political conflict, or images of those supporting the anti-Israeli “BDS movement,” which seeks to “Boycott, Divest, and Sanction” the only democracy in the Middle East. What the news is not showcasing is what the world should know about the State of Israel — that despite these challenges, it continues to grow with an economy that happens to be one of the world’s most vibrant.
Earning the name “Start-Up Nation,” Israel — behind the United States — is home to the highest number of start-up companies in the world, ranking as the third-highest country with the most NASDAQ listed companies. Outside of Silicon Valley, Israel is home to more tech companies than anywhere else.
When looking at Israel’s relationship with Kansas specifically, roughly 60 Kansas companies have already begun doing business with Israel, including Aerospace Controls Corporation, Garmin Communications, and Penny & Giles Aerospace. Israel also currently ranks as one of Kansas’ top 20 trade partners, with key development in the areas of agriculture, aviation, irrigation, and healthcare.
Currently, 28 states have shown bipartisan support for investing in Israel’s debt securities, and proceeds are used to develop all sectors of Israel’s economy. Warren Buffett, arguably the world’s most renowned and successful investor, stated that “the purchase of Israel bonds is a sound investment and a deserved endorsement of a remarkable country.”
Since the introduction of anti-BDS legislation in Kansas, Kansans from every corner of our state have voiced their strong support for it. In this case, increasing investment options could be a win-win for both Kansas and Israel. I hope this legislation will find the support that it needs to be successful, as yet another way for Kansans to declare, “We stand with Israel.”
Jake LaTurner is the Kansas State Treasurer.