State Treasurer Michael Frerichs, left, and his opponent Tom Demmer are photographed during the political days of the Illinois State Fair in Springfield. (Photo from Capitol News, Illinois)
Wednesday 21 September 2022
State investment chief candidates make their case
By JERRY NOWICKI
Illinois Capitol News
SPRINGFIELD – In Illinois, the role of the state treasurer is that of chief investment officer.
Treasurer Michael Frerichs has held the position for two full terms, winning by less than 10,000 votes in 2014 before winning 18 percentage points in 2018.
He boasts that Illinois has earned more than $1.2 billion in interest income on his investments since taking office, making him the second treasurer since Republican Judy Baar Topinka, who held the post from 1995 to 2007 and that threshold was reached.
“We raised more than a billion dollars for the state of Illinois,” he said in a podcast interview with Illinois Capitol News. “A billion dollars that don’t need to be raised in taxes, or a billion dollars in unnecessary cuts to things like our schools, our roads and our bridges.”
He said the Treasury’s Office invested about $26 billion in the state’s wealth fund, about $15 billion in pooled city assets, and managed a college savings program that saved Illinois residents nearly $17 billion, among other must-have responsibilities.
His opponent is Rep. Tom Demmer, a Dixon Republican who has been a member of the General Assembly since 2013 and is currently Deputy Minority Leader of the House of Representatives. He is the contact for Republicans in the House of Representatives on budget matters.
Demmer said the focus is on adding a Republican review of Democratic powers to state constitutional officials — including governors, comptrollers, attorneys general, secretary of state and treasurer — all of whom are currently held by Democrats, though all of which will be in place for a long time. voting in November.
“When one party really controls every aspect of government, sometimes the people in the office have no incentive to speak up,” Demmer said in an interview with Illinois Capitol News. “You don’t want to rock the boat. They don’t want to try to hold others accountable because they’re in the same party, and they don’t want to tug at the pen. This is not how our government works.”
Each candidate spoke to Capitol News Illinois’s Capitol Cast podcast to share their plans for the office.
Frerichs notes his office’s efforts to increase transparency through The Vault, an online portal that allows Illinois residents to find analysis from the office and information about state investments and loans.
“So he said the office should be a balance between the governor and the General Assembly, but ignored the fact that we’ve already done that through examples like signing a joint commitment agreement to enable infrastructure improvements, and the General Assembly doing that is creating new programs like the Safe Choice Retirement Savings Program. ,” said Frerichs.
While the Treasurer has no official role in setting tax policy for the state, Demmer’s most common criticism of Frerichs has to do with a Frerichs-backed income tax amendment that would have raised tax rates for higher recipients but was rejected by voters in 2020.
Speaking at a forum in 2020, Frerichs said tiered income taxes could allow for a broader discussion about taxing high retirement income.
“Treasurer Frerichs could come out and argue why we should tax retirement income, I would argue why we shouldn’t tax retirement income,” Demmer said.
Frerichs has repeatedly said that he does not support the pension tax.
He said he made the 2020 comments in discussions with Illinois Chamber of Commerce President Todd Maisch at a forum to debate tiered income taxes. Frerichs said he was trying to convey the message that he is not advocating a pension tax, but anyone who wants a pension tax should support a tiered tax structure that allows taxation only at higher income levels than the flat tax required by current law.
“I made it very clear, and my opponents know it, that I don’t support pension taxes. I don’t support the pension tax, and I’m not going to support the pension tax,” he said, accusing Demmer of repeating claims he was distracting from his anti-abortion record and placement on the Republican ticket favored by controversial candidate Darren Bailey.
Demmer chose not to talk about Bailey. There was no support, although Demmer said at a news conference earlier this year that he believed Bailey would make a good governor.
“We’re trying to come up with a plan that’s very focused on tax issues and spending dollars and cents,” said Demmer. “So you’re trying to cut through the rest of the mess that comes up just by having a very direct message.”
Demmer was among a number of candidates backed by mega-donor Ken Griffin in the Republican primaries. These included Aurora Mayor Richard Irvin as governor, John Milhiser as secretary of state and Steve Kim as attorney general – all of whom lost the primaries.
Demmer and Audit Candidate Shannon Teresi both ran unopposed in the primaries and were the only candidates on the list to run in the general election. But the $50 million Griffin gave Irvin hasn’t arrived yet.
Demmer left that with a fundraiser. His campaign finance balance was $465,000 as of June 30, and he reports having raised about $68,000 since then.
Meanwhile, Frerichs had $2 million in the bank as of June 30 and has since raised at least $360,000, with hundreds of thousands of dollars coming from the union.
While Demmer downplayed the gap between candidates, attributing it to the challenges of fundraising in general, Frerichs said his success in office made fundraising easier for him.
Frerichs is also promoting the administration of the Bright Start 529 college savings plan, which is rated Gold by financial services firm Morningstar. It is managed by outside partners and often outperforms the market, Frerichs said, although many plans in the program have posted negative returns over the past year.
In 2016 and 2017, his office hired a new investment manager for the fund, which offered more plans and lower fees, he said, creating savings for those participating in the plan.
“Plans funded grew from $387,000 worth about $7 billion (in 2015) to $824,000 worth more than $16 billion (in 2022),” he said.
Demmer said his proudest achievement in the General Assembly was as a member of an informal bipartisan working group that negotiates Medicaid policies.
“This is a key area where we need to make sure that if we make promises, we are able to keep them,” he said, referring to the state administration’s health program. “So working on that bill year after year, having a direct impact on what’s and isn’t on that bill is something I’m really proud of and I think it’s a tribute to what was done, when the time came, an opportunity to work collectively. non-partisan.”
Demmer was the sponsor of a bill in the General Assembly that would propose to voters a constitutional amendment to turn the auditor’s office into a treasurer’s office. Demmer said he believes it could save about $10 million in taxpayer dollars.
This is something that Frerichs and Demmer support, though Comptroller Susana Mendoza called it a bad idea that only came up in election years. He said the 1970 constitution separated investment and tax offerings to provide fraud protection.
“For 1956, Orville Hodge, doing the combined work of treasurer, auditor, and auditor, embezzled $6 million, which is about $59 million today,” Mendoza said. “So in 1970 the legislature decided to split the responsibilities … and never allowed that to happen where whoever put the money also had access to the checkbook.”
Demmer’s proposal must be approved by three-fifths of both houses of the General Assembly before it appears on voters’ ballots, making it difficult to actually become law.
Capitol News Illinois is a nonprofit, nonpartisan news service that covers the state government and is distributed to more than 400 newspapers throughout the state. It is primarily funded by the Illinois Press Foundation and the Robert R. McCormick Foundation.
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Source : localtoday.news