The next 'keeper of the public purse'

by Tom Campbell, Executive Producer and Moderator, NC SPIN, October 16, 2015.

State Treasurer Janet Cowell’s surprise announcement she wouldn’t seek re-election left many wondering who should be the next “keeper of the public purse.” Former longtime State Treasurer Harlan Boyles frequently said this was the most important position in state government that nobody knew anything about

Our next Treasurer needs a unique combination of experience, skills and deftness. The Treasurer serves on more boards and commissions than any other elected state official, including the Council of State, State Board of Education, State Community College Board, chair of the State Banking Commission and many others. This office works with our state’s banks and financial institutions to oversee banking relationships, requiring good relationships with state and national financial leaders.

The Treasurer must work with our Governor and legislators as a financial advisor, helping structure state borrowings and market them to investors, all the while assuring the full faith and credit of our state to repay debts so as to maintain our coveted Triple-A credit rating.

The Local Government Commission, housed in the Treasurer’s office has a major role working very closely with elected and appointed local government officials in reviewing and overseeing their financial management, as well as approving government debt, helping them borrow money and assuring timely debt service.

Perhaps the most important role is as a fiduciary to some 600,000 present and retired teachers and state employees. The Treasurer works with the legislature to appropriate moneys to guarantee our retirement systems remain as fully funded as practicable. Equally important, the Treasurer invests some $90 billion in retirement funds, carefully weighing risk and reward factors so as to earn the maximum returns without endangering the retirements of these people who have worked so hard to earn them.

This awesome responsibility has come under question recently. Our Constitution gives the final investment authority to the Treasurer and during my years as Harlan Boyles’ Assistant Treasurer we studied how other states made these decisions. Our next Treasurer needs to tread carefully, lest we allow these to become political decisions, setting up possible pay-to-play practices where those making the decisions benefit from campaign contributions, trips or other benefits. The primary focus must be to benefit the employees, not financial houses or politicians.

Our next Treasurer will also be involved in long-delayed discussions about the type of retirement plans we offer public employees. Our current system of a defined benefit plan has potential pitfalls. Most private and many public employers have switched to defined contribution plans and we must take great care to make sure we do what’s right for employees while also doing what’s best for taxpayers.

Most recently, the Treasurer has been given the responsibility for managing the State Health Plan, a complex task that provides state and local government employees with health insurance plans for themselves and their beneficiaries, works with care providers and hospitals, and pays claims on a timely basis.

While the Treasurer must get elected statewide we don’t need a politician in this office, neither is it a post for someone seeking higher office or wanting to land a high-paying job with a big investment house. There are big decisions ahead and this post requires the right person to navigate these waters. We must select carefully the next “keeper of the public purse.”