Why are you running for office?

I am running for office as I am uniquely qualified to address the central issue that faces our State in the Treasurer’s Office: the poor performance of our pension plan has resulted in $2-3 billion dollars a year of our taxpayer’s money being wasted. That money can be better used to give our retirees a cost-of-living adjustment, to pay our teachers, to build more roads, or to reduce people’s taxes.

Fixing this underperformance will not be easy; it requires much more than reducing the excess cash that is held in the portfolio. We need a Treasurer who not only has deep investment experience, but who also has managed large organizations. I have done both things with great success; my opponent has never done either. The job of State Treasurer is no place for on-the-job training.

If you are elected, what will be your top priority in office?

The most important financial issue facing our state is the lackluster performance of our pension plans. In addition to the expertise required to fix this problem that I bring to the role of Treasurer, I believe it is time to adopt the reforms recommended 10 years ago by the Investment Fiduciary Governance Commission and change how we govern our pension plans.

North Carolina is one of only three remaining “sole-fiduciary” states in the country; this means we give one person absolute power to invest our state’s money. 47 states have moved away from this model, as the potential for abuse and fraud is too high. While we have been fortunate in this state to have had amazing public servants in the Treasurer’s role, the other two states (New York and Connecticut) have not been so lucky. Each has lived through long investigations with former officials being put in jail.

Moreover, investment performance in sole-fiduciary states is on average substantially lower. The reason for this is that sole-fiduciary leads to changing investment strategies every 4 or 8 years, depending on who is elected. Having a long-term investment strategy is critical in managing a portfolio like our state pensions, and this reform would help facilitate that.

What is the top challenge facing North Carolina, and how would you address it?

The top challenge facing North Carolina in my opinion is the large unfunded liabilities that we face in our state pension plan and our state health plan. They currently total about $50 billion that we owe to our former and current state employees.

While this is far from the headlines, this debt requires a large and growing portion of the state budget each year to be diverted to these programs. This prevents us from using those dollars for other priorities – schools, roads, tax reduction, etc. We have gone from 4% to 16% of the state budget dedicated to these over the last decade, so if we do not manage both plans better, they could soon consume a substantially larger portion of our available funds, which prevents us from addressing many other problems. That is why I view this as our top challenge – if poorly managed, it limits our ability to address any other challenges.

What is an issue in North Carolina you feel not enough people are talking about it? How would you use the power and influence you’d have in this position to address it?

Our State Health Plan is facing a substantial budget shortfall. There are several short- and long-term steps necessary to insure solvency for the State Health Plan.

In the short term, we need to re-negotiate the PBM contract with CVS to a cost-plus model, which should save tens of millions annually. We also need to either complete or abandon the Clear Pricing Plan – it is a worthy initiative but without an ability to compel participation, it raises costs.

In the long term, the State Health Plan needs to move toward an accountable care model – empowering primary care doctors to help manage specialist care for their patients. With price and quality data that are now becoming available, State Health Plan members, working with their doctors, will be able to choose higher quality providers, at lower expense, in the future.

How do you work with others you don’t agree with?

If elected, I will keep an honest and independent approach in the State Treasurer’s Office, working with both sides of the aisle regardless of party affiliation. What matters to me, in working with people with whom I do not agree, is candor, good intent, and an open mind – I can work with anyone who meets those criteria. I have run multiple large organizations previously, consistently demonstrating a track record of success leading teams with diverse opinions on just about everything.

As I like to say, there is a scoreboard in investing – the numbers speak for themselves. I will listen to and consider all advice and opinions on how to ensure successful investments for our state retirees and a strong State Health Plan for current and retired state employees.