On Tuesday, North Carolina voters will elect a new governor. They'll also make selections for Council of State offices. Isaac-Davy Aronson has this look at the two candidates for State Treasurer.
Steve Royal thinks North Carolinians should be very worried.
Steve Royal: "We cannot continue promising people this money in the future at the rate we are right now. It simply is not sustainable."
Royal is the Republican candidate for State Treasurer. The Treasurer is North Carolina's chief banker and investment officer, manager of the state pension fund, and as of a few years ago, manager of the state retiree health plan. An accountant in Elkin, Royal says he's running on two issues: debt, and what he calls realistic accounting. His opponent is incumbent Democrat Janet Cowell.
Janet Cowell: "In the first four years in office, we've worked well to achieve good outcomes for the people of North Carolina. We've worked on a bipartisan basis, equally well with Republicans and Democrats. And we've really tried to keep the office professional. This is not an office where you want ideology to carry the day."
The mention of "ideology" is certainly a swipe at Royal. His underlying philosophy is that the threat posed to the economy by massive debt is being obscured by accounting gimmickry. He wants North Carolina and neighboring states to form a regional currency, as a safety net for when the unsustainable status quo collapses.
Cowell says her record speaks for itself.
Janet Cowell: "We're one of eight states remaining that still has a AAA bond rating, which is sort of a Good Housekeeping seal of approval, and we also have one of the best-performing pension plans, meaning that the plan is well-funded and we've kept our promises."
Royal says Cowell simply isn't telling us everything.
Steve Royal: "No it's not fully funded; that's a misnomer. I always tell everybody, it's not fully funded, and you soon will find out how un-fully funded it is because there's new requirement reporting that's going to come into effect."
Experts say potential accounting changes by a federal board are already taken into account by the pension fund's formulas. But Royal insists that with more transparency, the dire fiscal situation will be clear. What's not clear is whether he thinks the state's obligations to retirees need to be reduced, or whether better investing and accounting practices by the Treasurer could solve the alleged problem. He says he would manage the pension fund's investments more actively, reducing fees paid to outside managers, and eliminate what he calls pay-to-play relationships with money managers and law firms. Cowell says her office is one of the most tightly regulated in the state and investment managers are chosen based on their long-term performance.