State treasurer

State treasurer
Post	State Treasurer
Body	the United States
Department	State government
Reports to	Governor or State legislature
Appointer	Popular election or Gubernatorial appointment
Termlength	Varies by state

State treasurer. A state treasurer is a constitutional or statutory officer in the government of a U.S. state responsible for the oversight and management of state finances. The office exists in 48 of the 50 states, with Texas and New York assigning its duties to other officials like the Texas Comptroller of Public Accounts. The treasurer typically serves as the state’s chief banker, cash manager, and custodian of public funds, playing a critical role in the state's financial system.

Role and responsibilities

The primary duty of a state treasurer is the safekeeping and investment of state revenues. This involves managing the state’s cash flow, overseeing the state treasury, and administering the investment of billions of dollars in public funds, often through a state investment board. Treasurers also frequently administer key public finance programs, such as college savings plans like 529 plans, unclaimed property divisions, and local government investment pools. They are responsible for the issuance and servicing of state bonds and other public debt, working closely with agencies like the Municipal Securities Rulemaking Board. Additional functions can include serving on state pension fund boards, such as the California Public Employees' Retirement System, and certifying the state’s revenue estimates for the state budget process.

Election and appointment

The method of selection for state treasurer varies significantly across the United States. In many states, including Florida, Illinois, and Ohio, the treasurer is elected statewide in a partisan election, typically for a four-year term. In others, such as Virginia, Maine, and New Jersey, the treasurer is appointed by the governor and often confirmed by the state senate. Some states, like Tennessee, have the treasurer selected by the state legislature. The Missouri State Treasurer is elected, while the Hawaii State Treasurer is appointed by the Governor of Hawaii with consent from the Hawaii Senate. These differing processes reflect the historical and political traditions of each state’s state constitution.

History and evolution

The office of state treasurer has origins in the colonial governments of America, where a treasurer was appointed to manage the finances of the British Crown colony. Following the American Revolution, the position was enshrined in early state constitutions, such as those of Pennsylvania and Massachusetts. The role expanded dramatically in the 20th century with the growth of state government and complex public financial management. Landmark events like the Great Depression and the New Deal increased state fiscal activity, while the Municipal bond market growth in the late 1900s further professionalized the office. The creation of programs like the Oregon College Savings Plan and the modernization of unclaimed property laws have continually reshaped the treasurer’s duties.

Notable state treasurers

Several individuals have used the office of state treasurer as a springboard to higher national prominence. Jesse Unruh, the powerful California State Treasurer, was a dominant figure in California politics and a candidate for Governor of California. Phil Angelides later chaired the Financial Crisis Inquiry Commission. Benjamin Rush, a signer of the Declaration of Independence, served as Treasurer of Pennsylvania. In modern times, figures like Michele Leonhart and Sarah Godlewski have held the post before pursuing other offices. The role has also been a historic entry point for women in government, such as Maryland's Nancy Kopp.

Relationship with state finance

The treasurer operates within a complex state financial infrastructure, interacting with the state comptroller or state auditor, the state legislature's appropriations committees, and the governor's budget office. They work with agencies like the Government Finance Officers Association to promote best practices. The office is integral to the state’s credit rating, as assessed by firms like Moody's Investors Service and Standard & Poor's, by ensuring prudent debt management and transparent financial reporting. Coordination with the Federal Reserve System and participation in organizations like the National Association of State Treasurers are also key components of the role.

Controversies and challenges

The office has not been immune to scandal and political conflict. A significant controversy involved the Orange County investment pool crisis in California, which led to bankruptcy and intense scrutiny of investment practices. Political challenges often arise from tensions with the governor's office over control of state funds or investment authority. Ethical controversies have included instances of pay-to-play schemes involving state bond business, leading to reforms and oversight by the Securities and Exchange Commission. Modern challenges include managing funds through economic crises like the 2008 financial crisis, addressing risks from climate change in investment portfolios, and navigating the political pressures of environmental, social, and corporate governance investing.

Category:State government in the United States Category:State constitutional officers in the United States Category:Government financial officials