Ohio Treasurer Candidates Hope To Make Office More Relevant
The five statewide executive offices will all turn over this year because of term limits on their occupants. The person elected treasurer will oversee Ohio’s $21.5 billion portfolio of investments, and will manage the collection of billions in state revenues.
The candidates have a few things in common: Both are named Robert, and both have engineering degrees. They both have ideas to take the treasurer’s office out of its typical low-key role and into more state activities.
Rep. Robert Sprague (R-Findlay), the Republican candidate, says the office has the legal authority to do more.
“There's more that the state treasurer's office can do particularly as it relates to some of those core functions and the authority that has already been given within the Ohio Revised Code,” Sprague said.
Rob Richardson Jr., the Democrat in the race, is an attorney and former head of the University of Cincinnati Board of Trustees. He wants the office to do more to help the people of Ohio.
“I've put a lot of thought into using the office and making sure the office is used in a way that actually helps Ohioans and is really more relevant,” he said.
Sprague said one of his plans is to bring the treasurer’s office into the fight against opioids with what he calls "social impact bonds."
“You can't get out of the heroin epidemic with an 11 percent recovery rate, but we could offer a financial tool that might incentivize the private sector to try new ways to treat heroin addiction that actually produce results,” Sprague said. “And if they produce results with this financial concept we will pay for them but only if they work better than what we're already doing.”
For instance, Sprague said a company or non-profit could issue a million-dollar bond to run a two-year pilot program, and if the program improves on that 11 percent recovery rate, the state could buy back the bond with interest with the money it saves on Medicaid and other costs.
Richardson said a better idea would be to use the state’s investments in pharmaceutical companies as leverage to get them to do more to help instead of using social impact bonds.
“My understanding of [those bonds] is, you spend money and you hope that the solution comes, and if it doesn't, the state still ends up paying,” Richardson said. “Now he would say that they don't, but they're going to pay. I'd rather make sure at the beginning I think we have to start from the premise of holding pharmaceutical companies accountable then we can look towards other means.”
Richardson also said he’d steer investments to companies that embrace diversity and civil rights for all.
Sprague has said he’s concerned that Richardson will use the treasurer’s office to advance his own political personal agenda. But Sprague has proposed investing in Israel bonds and has said it’s a way to promote President Trump’s foreign policy and help a key U.S. ally. But Sprague says it’s also a financially sound idea.
“Those Israel bonds actually get an 80 basis point premium, typically, over a lot of the domestic paper that we can invest in right now,” Sprague said. “So it makes sense economically for the taxpayers of the state of Ohio because they get a higher return on those bonds. I'm saying, look, if we're trying to get return and safety for the state of Ohio residents and the taxpayers, these investments make sense right now given the yield curve and given the investment environment.”
Richardson said he’s fine with Israel bonds. He said the office isn’t being used as a political tool if taxpayers know more about how their dollars are being used, and potentially hurting the state. He brings up the Ohio Public Employees Retirement System’s investments in privately-run prisons as an example.
“We invest in for-profit prisons which is not a true investment in a way because the state of Ohio is subsidizing that. And I think it's not morally right,” Richardson said. “The fact that there's a focus on locking people up to make profits not to keep us safe not to rehabilitate but to make profits. My opponent is O.K. with that. He's O.K. with putting the profits of the few at the expense of the many. It will cost the taxpayers more cost opportunities for folks. So I'm very comfortable making sure this office can be what I like to call the chief accountability officer.”
Sprague says the treasurer can’t dictate anything to the pension systems, but Richardson says the treasurer does appoint members to the pension funds boards.
The treasurer’s office has often been low-profile, but in the last decade there were scandals, investigations and lots of attention on current treasurer Josh Mandel, who ran for U.S. Senate in 2012 and dropped out of that race this year.
But both Richardson and Sprague say they’re committed to serving a full four-year term.