The race for state treasurer is not high profile and, not surprisingly, it’s about money.
Last week’s candidate finance disclosures showed that Bob Holden and Claire McCaskill, the main candidates vying for the Democratic nomination for governor, each have more than $2 million in cash to run their campaigns. Sarah Steelman, who leads the treasurer’s candidates in campaign receipts has more than $500,000. That’s a lot of money for a race that, on admission from some of the candidates themselves, Missourians know little about.
A number of the treasurer candidates don’t want to be explicit about where their bucks are going, but media expenditures appear to be the No. 1 expense. Jason Klumb, whose has received the most finance contributions as a Democratic contender, said one week of comprehensive media coverage — including TV, radio and print — costs more than $500,000.
“I anticipate the treasurer’s race will cost between $750,000 and $1 million through the November election,” Klumb said. So far Klumb’s campaign has more than $250,000 in contributions.
Mark Powell, also running for the Democratic nomination, said he’s not concerned that he has raised about $135,000 less than challenger Mark Abel and about $220,000 less than Klumb.
“I feel I’ve outworked my opponents, having spent one year traveling around Missouri,” Powell said. “My opponents are hiring consultants and have other overhead that I don’t have. I’m spending my amount frugally and in better places.”
Chet Boecke, who is running for the Republican nomination, said it’s distressing that electoral races often come down to who has the most money, which often comes from special interests.
Campaign money aside, the treasurer’s race is also about what’s done with taxpayer money once voters have cast their ballots. In addition to managing cash flow and the state’s investment portfolio, the treasurer administers the Missouri First Linked Deposit, a low-interest loan program that allots up to $360 million at a time for deposits into Missouri banks at below-market interest rates. Eligible borrowers may then obtain low-interest loans from those banks. The treasurer’s office offers the program to promote growth and development in agriculture, job creation, small businesses, multi-family housing developments, drought relief and for student loans.
State Treasurer Nancy Farmer has about $23 million invested in the linked deposit program, all of which is being used to make loans for agriculture.
Interest rates are already so low, it doesn’t make sense for most people to take advantage of the state program, said Deputy Treasurer Chuck Miller.
“State law sets a 2 percent floor on what the state has to earn on linked deposit investments,” Miller said. “Interest rates are so low that banks aren’t asking for the program because they’d end up paying the treasurer’s office the difference between the rates they receive from borrowers and the treasurer’s rates, which are required by law. When the interest rate is between 7 and 9 percent, borrowers using linked deposit can take up to 2 percentage points off of the interest rate on a loan.”
Miller said another reason the treasurer hasn’t invested more in linked deposit is that at such low interest rates, borrowers prefer long-term loans.
“The catch is that linked deposit is only an annual program. People want to lock in longer-term low interest rates instead of reapplying every year and subjecting themselves to possibly higher rates,” Miller said.
What they think
Following are state treasurer candidates’ ideas for changes to the Missouri First Linked Deposit Program:
- served two terms as a state representative from 1992 to 1996
- wants to extend linked deposit by asking the legislature to approve a soldier relief program, which would offer low-interest loans to Missouri’s deployed soldiers and their families.
- worked as a banker for 24 years and was elected mayor of Arnold in 2001
- wants to expand the program by working closely with the banking industry and encouraging more banks to participate.
- is serving his sixth term in the Missouri House of Representatives
- wants to invest all $360 million available for linked deposit by 2010 and establish loans that last for up to five years. He also wants to expand eligibility by offering loans to retail businesses and provide incentives to get businesses to open in neighborhoods that lack commerce.
- making his second bid for the Republican nomination for treasurer after an unsuccessful run in 2000. He was elected to the state House of Representatives and served one term in 1992
- is relatively unfamiliar with the linked deposit program but says that he would like to get small banks involved in it.
- worked for 30 years as a professional stock and contract trader. He is also a former member and seat owner of the Minneapolis Grain Exchange and the Inter-Mountain stock exchange
- said he is not acquainted with linked deposit. He would like to make recommendations to the legislature to expand the program and would particularly like to help farmers who are threatened with the loss of their farms.
- founded Pundmann & Co., a private investment banking firm, in 1984 and now serves as president and chief investment officer. He is a former employee of TIAA-CREF.
- is unfamiliar with linked deposit but would like to create a new industry creation fund to attract new businesses to the state.
- works at Windows On Washington, a St. Louis banquet and catering facility, which he started in 1994
- wants to make sure that people know about the linked deposit program by traveling the state and talking to businesses and other organizations. He said it is a good way to stimulate the economy by giving money to fledgling businesses.
- is serving her second term as a state senator and worked as an economist for the Missouri Department of Revenue
- said she wants to use all of the $360 million available for the program in order to make loans to small businesses who will in turn create jobs for the state.
- is serving her second term as a state senator and has 30 years of experience in banking
- said she would seek statutory authority, if necessary, to allow Missouri loans to banks under linked deposit to cover three-year terms. She would also use the entire $360 million available for the program.
- is serving his third term as a state representative, works as a loan officer for St. Elizabeth Bank and owns the Luetkemeyer Insurance Agency
- said he would like to expand the program to up to $1 billion and allow local governments to use linked deposit when they want to borrow to finance public buildings such as schools and city halls. He also wants to investigate opportunities to offer short-, mid- and long-term loans.
Lisa J. Emerson
- is a recent MU graduate with bookkeeping experience
- is not in favor of the linked deposit program, which she says hinders economic growth and development and encourages government theft. She says the program goes against market efficiency by allowing the state to take money from the pockets of Missourians and redistribute it according to its social engineering agenda.