And what does a state treasurer do?

A few weeks ago I wrote about the important and little-known position of State Auditor General — one of three executive positions up for election this November. This obscure office may be a step above the state treasurer's office in terms of visibility — meaning you'll be hard-pressed to find any coverage or find anyone talking about the race. (The third, Attorney General, is slightly better known.)

That's a shame because the treasurer plays a critical role in managing the nation's sixth-largest economy. The treasurer is the state's chief financial officer. Taxes, investments, fines and fees – all this money is sent to the treasury and then used to pay our bills. Payroll for state employees runs through the state treasury, as do pensions, unemployment benefits, agency budgets, and state investments and debts.

Money (to the tune of $163 billion from government funds) is coming in. Bills are paid. And then about $50 billion is managed and invested on behalf of Pennsylvania taxpayers. $163 billion is an incredible sum – almost as much as the annual defense budgets of Russia and Ukraine combined.

In addition to keeping the books balanced, the state treasurer oversees several important programs, including: PA ABLE (a program to save people with disabilities), PA 529 College and Career Savings (which sets college tuition and families in Pennsylvania helps save for higher education), Keystone Scholars (which are government grants of $100 for each baby born, which are invested in a child's growth so they can afford college), and INVEST (low-cost Investment pools tailored to local authorities and non-profit groups). The Treasury also operates the Unclaimed Property Bureau, which we will discuss in a moment.

First, a little history

The State Treasurer is a very old office from the early 18th century. The first state treasurer was Samuel Carpenter, a close friend of William Penn. His son (Samuel Carpenter II) died at 30 years old before the Declaration of Independence was signed.

A traveler from this colonial period would be quite confused about the whole state treasurer election thing (and also why women, black and white, who don't own land vote at all). The state constitution of 1776 specified that the office of treasurer should be elected by the House of Representatives. Fourteen years later, the Constitution of 1790 specified that the Treasurer should be elected by a joint vote of the General Assembly. It was not until an amendment in 1872 that voters were given the right to directly elect their state's CFO.

Like so many offices in Pennsylvania, the Treasury Department has a long and sordid history that began in 1809, when the Legislature first created the Office of the Auditor General to, among other things, audit the treasurer's work. PA lawmakers foresaw possible tensions between the state's chief financial officer and the newly appointed “chief financial watchdog.” You don't have to be Nostradamus to suspect that a treasurer (who balances the state books) and an auditor (who oversees this balancing) could clash.

From state archives we learn that the Auditor General originally “made settlements of public accounts which then went to the Treasurer.” The treasurer was obliged to “cut vouchers”. If he disagreed with the AG, he could appeal to the governor. And if the treasurer withheld funds during this back-and-forth over the books, the AG could pull a “warrant” on the state treasurer for payment.

The treasurer was also held responsible if he did not comply with the auditor's request to fully open his books. If “the Office of the Treasurer withholds documents required or requested by the Comptroller, the Treasurer may be subject to a fine.”

On the fourth Monday in December, the Treasurer presented to the General Assembly a full report of all “receipts and expenditures” of the state (this tradition continues with the annual investment report). On the same day, the comptroller submitted a separate report on the state finances, which included an official report on the “Status of the Ministry of Finance”. It's like having two defendants tell the same story in separate rooms to make sure the details match.

The animosity between these two executive offices has historically been so great that a constitutional amendment in 1967 “prohibited” a treasurer from serving as auditor general until four years after he left the Treasury. Foxes in the chicken coop and so on.

How effective these tactics were in keeping state treasurers in line is somewhat difficult to assess, but let's just say the position was…vulnerable to the lesser angels of our nature. In 1889, Treasurer William Livsey became involved in a sting operation that targeted not only him but also four former treasurers in a grand jury indictment for “improper use of government funds.” In 1907, Treasurer William Mathues was sentenced to two years in the Eastern State Penitentiary for “conspiracy to defraud the state.” And 80 years later, Treasurer Budd Dwyer…shocked the nation on live television after being found guilty of 11 counts of conspiracy, fraud and racketeering.

Fortunately, most treasurers' tenures are relatively unremarkable. Unfortunately, so are their campaigns.

Who is running for state treasurer?

Democratic candidate Erin McClelland is a substance abuse and mental health counselor from Allegheny County who won a surprise victory against State Representative Ryan Bizzarro. Her campaign raised a whopping $6,000 before the primary, compared to Bizzarro's quarter million, and the Democratic establishment rallied behind Bizzarro. But McClelland still beat him by nine points when the dust settled. Since then, she has received support from statewide AFSCME union leaders and Senator John Fetterman, among others.

McClelland spent much of her career in the addiction recovery world and became a small business owner in 2006 when she opened the “first and only orthomolecular addiction recovery program in Pennsylvania.” She had already run unsuccessfully for a seat in the US House of Representatives twice, in 2014 and 2016.

On the qualifications that enable her to move from addiction counselor to state treasurer, McClelland writes: “(From 2003) I had the privilege of training under the leadership of former Treasury Secretary Paul O'Neill, where I studied supply chain logistics and lean Learned processes.” Improvement strategies.” So… tutoring?

Also irritating: the fact that it was discovered that she had raised money for her campaign before she officially announced her campaign – a taboo in Pennsylvania. That is a strange Way to show voters that you know how to raise and spend their money.

McClelland's opponent is incumbent Stacy Garrity, also known as “The Angel of the Desert.” The latter part of this nickname was reportedly given to Garrity during one of her three tours to the Middle East in the U.S. Army Reserve (as a member of the military police, she oversaw the detention of Iraqi prisoners without any complaints of abuse). Garrity runs her campaign with references to her military service. In addition to prominently displaying photos from her time in the Reserves, Garrity invites voters to “Join Stacy's Army today!” by making a donation. (The Army of the State Treasurer would certainly be one of the dullest native militias in American history.)

Although she is the boss of the current establishment, Garrity portrays herself as an outsider with her re-election slogan: “One of us – not a politician.”

Garrity is a full supporter of former President Donald Trump. As treasurer-elect, she gave a speech at the Capitol on January 5, 2021, stating that the election that Trump had just lost was “forever tarnished.” (She denies being anywhere near Washington during the insurrection that took place the next day.) She supported him early in that election, writing on X in January: “There is only one man I trust, that he gets the job done.” She also publicly celebrated the coup Roe v. Wade (“This is a great day for the sanctity of life.”)

Still, as treasurer, Garrity has worked with politicians on both sides of the aisle, including receiving support from Philadelphia Building Trades, whose chief executive Ryan Boyer called her “the real deal” and praised her for visiting every county in Pennsylvania every year of hers Term.

During her time as treasurer, Garrity has advocated for transparency in the office (you can access a transparency portal on the Treasury website that allows you to compare spending over the past three years). She has also made a priority the return of about $4.5 billion in “unclaimed property,” ranging from unclaimed paychecks to military medals that never reached recipients. Last year, Garrity returned $274 million of that property to its rightful owners.

There have been 14 state treasurers since 1961. All but four were Democrats (Tim Reese won as an independent in 2015). Will PA voters return Democratic CFO to office in November, despite McClelland's lack of experience and campaign accounting errors? After all, financial accuracy is the main point of the work. Will Garrity keep her seat despite challenging the results of the 2020 election – or perhaps even be empowered by it? Numbers are, after all, a representation of facts, and our Treasurer is the custodian of those numbers.

How important that is, dear reader, is up to us.

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Photo by Giorgio Trovato on Unsplash