California State Treasurer

Position in state government

The state treasurer of California is a constitutional officer in the executive branch of the government of the U.S. state of California. Thirty-five individuals have held the office of state treasurer since statehood. The incumbent is Fiona Ma, a Democrat.^[1] The state treasurer's main office is located in the Jesse M. Unruh State Office Building in Sacramento.

Election and term of office

The state treasurer assumes office by way of election. The term of office is four years, renewable once. Elections for state treasurer are held on a four-year basis concurrently with elections for the offices of governor, lieutenant governor, attorney general, secretary of state, state controller, insurance commissioner, and superintendent of public instruction.

Powers and duties

In California, the state treasurer serves as the chief banker of state government.^[2][3] As such, the state treasurer:

• Manages the state's cash flows. Cash management involves the collection, accounting, deposit and use of money and securities received by the state. Centralizing cash management within the state treasury allows for better monitoring of the state's cash position, fund balances and liquidity, thereby allowing the state of California to more effectively pay its bills and invest idle funds.^[4][5]
• Coordinates banking services across state government. This function entails designating banks and other depository institutions as eligible to receive public deposits, ensuring public depositories have sufficient collateral, and administering California's Time Deposit Program.^[6][7][8]
• Safeguards public funds held in the state treasury. The state treasurer pays out sums of money only on warrants lawfully drawn by the state controller or pursuant to state agency vouchers examined and approved by the state controller.^[8][9]
• Issues and manages public debt. To this end, the treasurer is trustee, registrar, and paying agent for all general obligation and revenue bonds contracted by the state of California.^[10] In addition, the state treasurer supervises and reports on municipal debt.^[11]
• Invests state funds. Assets under the state treasurer's management include state and local government investment pools along with California's ABLE, college savings, and retirement savings trust funds. However, the state treasurer does not direct the investment of pension funds. Public pensions in California are instead invested by the respective boards of trustees of the California Public Employees' Retirement System and the California State Teachers' Retirement System. Nevertheless, the state treasurer is an ex officio member of these boards.^{[12][13][14][15][16]}
• Administers California's ABLE, college savings, and retirement savings programs.^[17][18][19] These tax-advantaged, state-facilitated programs promote affordable higher education, financial security for disabled Californians, and a secure retirement.
• Chairs the Tax Credit Allocation Committee and serves as an ex officio board member of the California Housing Finance Agency. These panels award hundreds of millions of dollars annually in tax credits for affordable housing and finances affordable housing projects throughout the state.^[20]
• Chairs or serves on dozens of boards and commissions, most of which relate to the marketing of bonds and their management. The bonds so issued finance a wide range of significant projects, including pollution clean-up, transportation infrastructure, renewable energy development, fish and wildlife conservation, economic development, student loan refinancing, school buildings construction and maintenance, and financial aid to small businesses, nonprofits, and health care facilities.^[21]

History

The Office was retained as an elective office in the New Constitution of 1879, in recognition by the Workingman's Party (which factored heavily in the State's constitutional convention) that The Treasurer had a significant impact on local credit guidance under the National Bank system established by the Lincoln Administration. Transcontinental cash settlements were still restricted, so California's local development was driven by a relatively high proportion of local gold reserve deposits. In 1907, the State Treasurer was instrumental in a massive expansion of credit to rebuild San Francisco after the 1906 Earthquake,^[22] however, at that time the Treasurer was essentially an office controlled by the railroads. In 1907, the expansion of California money supply led by the Treasurer selling bonds to build the Port of San Francisco seawall exposed liquidity problems due to corruption in the New York Clearinghouse, causing the Panic of 1907.^[23]

Progressive governor Hiram Johnson left the office essentially untouched. Of the office, he had this to say in his first inaugural:

The most advanced thought in our nation has reached the conclusion that we can best avoid blind voting and best obtain the discrimination of the electorate by a short ballot. A very well known editor in our State, during a recent lecture at Stanford University, challenged the faculty of that great institution to produce a single man who had cast an intelligent vote for the office of State Treasurer, and none was produced. Fortunately our State Treasurer is the highest type of citizen and official. The reason the challenge could not be met was that, in the hurry of our existence and in the engrossing importance of the contests for one or two offices, we can not or do not inform ourselves sufficiently regarding the candidates for minor offices... If we can remedy this condition it is our duty to do so, and it is plain that the remedy is by limiting the elective list of offices to those that are naturally conspicuous.^[24]

The creation of the Federal Reserve in 1913 significantly restricted the power of the State Treasurer to influence local economic development, essentially centralizing National Monetary policy. During the First World War, this was deployed toward War Mobilization. Still, State Bond issuance for major infrastructure projects characterized the office into the 1960s, including bonds for the State Parks System in the 20's, to build facilities for the 1932 Olympic Games, for the Postwar expansion of the University of California and State University Systems, for the State Water Project of 1960, and for the massive expansion of the State Prison System in the 1980s. As California's population and economy expanded, the Local Agency Investment Fund became a significant market player, and the Office developed the capacity to bail out troubled corporations by buying up their bond issuances.

Ivy Baker Priest stands out as the first woman to be elected to any California statewide office (from 1967 to 1975), having already served as Eisenhower's Treasurer of the United States in the 1950s. She was famous for aphorisms, including "We women don't care too much about getting our pictures on money as long as we can get our hands on it." With the election of Kathleen Brown in 1990 as a Democrat, the Democratic-lead legislature significantly expanded the scope and duties of the office; however, the Orange County Bankruptcy also lead the legislature to significantly curtail the permissible investment policies of Treasurer-administered pooled local investments. Although the Treasurer has nominal advisory authority over local debt issuance, the Treasurer was powerless to prevent local government entities such as Stockton or San Bernardino from falling into insolvency.

List of treasurers

See also

• Impeachment in California

References

1. "Fiona Ma -- A Biography". California Office of the State Treasuer. Retrieved August 13, 2021.
2. "Responsibilities and Functions". California Office of the State Treasurer. Retrieved August 13, 2021.
3. "Treasurer's Office Programs". California Office of the State Treasurer. Retrieved August 13, 2021.
4. "Centralized Treasury and Securities Management Division". California Office of the State Treasurer. Retrieved August 13, 2021.
5. "Time Deposit Program". California Office of the State Treasurer. Retrieved August 13, 2021.
6. "Financial Services Section". California Office of the State Treasurer. Retrieved August 13, 2021.
7. "Securities Clearance Section". California Office of the State Treasurer. Retrieved August 13, 2021.
8. "Collateral Management Section". California Office of the State Treasurer. Retrieved August 13, 2021.
9. "Item Processing Section". California Office of the State Treasurer. Retrieved August 13, 2021.
10. "Public Finance Division". California Office of the State Treasurer. Retrieved August 13, 2021.
11. "California Debt and Investment Advisory Commission". California Office of the State Treasurer. Retrieved September 5, 2022.
12. "CalABLE". California Office of the State Treasurer. Retrieved August 13, 2021.
13. "CalSavers Retirement Savings Program". California Office of the State Treasurer. Retrieved August 13, 2021.
14. "ScholarShare Investment Board". California Office of the State Treasurer. Retrieved August 13, 2021.
15. "Local Agency Investment Fund". California Office of the State Treasurer. Retrieved August 13, 2021.
16. "Pooled Money Investment Account". California Office of the State Treasurer. Retrieved August 13, 2021.
17. "CalABLE Board". California Office of the State Treasurer. Retrieved February 8, 2022.
18. "ScholarShare Investment Board". California Office of the State Treasurer. Retrieved February 8, 2022.
19. "CalSavers Retirement Savings Board". California Office of the State Treasurer. Retrieved February 8, 2022.
20. "California Tax Credit Allocation Committee". California Office of the State Treasurer. Retrieved August 13, 2021.
21. "List of Boards, Commissions, and Authorities". California Office of the State Treasurer. Retrieved August 13, 2021.
22. "Rebuilding San Francisco Following the 1906 Earthquake".
23. "The Financial Panic of 1907: Running from History".
24. "Governors of California - Hiram Johnson. Inaugural Address".

External links

• Official website