Oregon Treasury Candidates Talk Issues, Compared

Jeff Gudman, Democratic treasurer candidate, wants PERS balanced

Jeff Gudman is trying for a third time to become Oregon state treasurer, but first the former Republican will need to secure the Democratic nomination.

Gudman, a private investor and former Lake Oswego city councilman, is running against state Sen. Elizabeth Steiner, D-Portland, in the May 21 Oregon primary. Gudman previously ran twice for state treasurer as a Republican against current Democratic Treasurer Tobias Read and lost by 10% in 2020 and 2% in 2016. Gudman decided to run as a Democrat because the Republican Party’s values no longer align with his own, he said, singling out the party’s attempts to restrict women’s health care and access to abortions.

“The values I have with respect for the dignity of every individual, to help them when they’re down, to make quality of opportunity a reality and not just a theory, the Republican Party left me,” he told the Capital Chronicle in an interview.

The winner of the primary will run in the Nov. 5 general election against the lone Republican candidate, state Sen. Brian Boquist of Dallas. The winner will serve a four-year term with a two-term limit during any 12-year period. The current office holder, Tobias Read, is term limited and running for secretary of state.

The treasurer sits on several financial boards and the State Land Board, which manages Oregon land trusts for the Common School Fund. The treasurer also serves as the central banker for state agencies and manages more than $100 billion in state investments and programs, including the $94 billion in the Oregon’s Public Employee Retirement System, or PERS.

As treasurer, Gudman’s top priorities would be to secure PERS solvency; increase transparency around investments and private investment firms working with the Treasury; and use the office as a bully pulpit and a bank to encourage investment in infrastructure projects for small communities around the state.

As a city councilor in Lake Oswego for eight years, he said his “focus was on infrastructure, infrastructure and infrastructure.”

Gudman’s plan

Gudman sees the treasurer’s office as influential in getting needed infrastructure, such as housing and roads, built in small communitie. He said he would leverage the agency’s bonding programs to spur investment in projects and establish a committee to make recommendations for infrastructure investments to the Legislature.

To help deal with the PERS $28 billion in unfunded liability, Gudman would ask the Legislature to commit $100 million per year for 10 years to the fund, easing the contributions from governments and schools.

Gudman said he’d make information about state investments easily accessible to the public online, decrease the amount of PERS money which is held in private equity and tour each county in the state to meet with the public and answer questions about investments.

Besides serving as a city councilor, Gudman has served as a controller, analyst and treasurer for a number of organizations, including USA Olympic Swimming and the Clackamas Free Clinic, which offers health care to low-income residents in Clackamas County. He’s regularly attended public portions of the PERS board meetings and Oregon Investment Council meetings for the past 15 years, he said, and has more than 45 years of investing and budgeting experience.

Oregon’s treasurer oversees billions in state investments, including the PERS fund, and manages public banking and savings programs, including the Oregon College Savings Plan and OregonSaves, a retirement plan for self-employed workers.

Steiner, Gudman’s opponent, is considered a front runner with the benefit of name recognition after serving as a state senator representing part of Portland for more than a decade, including co-chairing the powerful budget-writing committee for about five years. But Gudman said his experience is a better match.

“We need to stop thinking about the treasurer as a super legislator,” Gudman said. “You want to think about the treasurer as someone who is going to be a financial leader. Who is going to speak out professionally, politely and forcefully on different issues. Senator Steiner isn’t where she is by pushing back against the establishment.”

Divestment of fossil-fuel holdings

The next treasurer will enter the office at a time when many PERS beneficiaries want the state to move away from fossil-fuel investments. Read’s Net-Zero Plan aims to phase out many of fossil fuel-related investments in PERS to make the portfolio essentially carbon neutral by 2050, and this session the Legislature passed the COAL Act, which directs the Treasury to unload coal-related holdings.

Gudman said he would honor the COAL Act’s guidance and Read’s plan but would not phase out investments in oil and gas entirely.

“We need to continue decarbonisation without question,” he said, adding: “Oil and gas and all the products that come with oil and gas are not going to disappear from our economy for decades. That means there’s going to be opportunities to make money in that.”

He said it would be more effective for the state to work with other managers of big pension funds that are invested in fossil-fuel companies to pressure them to move faster toward decarbonizing their holdings.

Elizabeth Steiner, Democratic treasurer candidate, wants more Oregonians to save

After 12 years in the Oregon Legislature and as a lead budget writer, Portland Sen. Elizabeth Steiner would like to become the state’s chief investment officer.

She is running for the Democratic nomination for state treasurer in the May 21 primary against investment manager and former Lake Oswego City Councilman Jeff Gudman. The winner of the primary will run in the Nov. 5 general election against the lone Republican candidate, state Sen. Brian Boquist of Dallas. Steiner, also a family physician and professor at Oregon Health & Science University, would be the first woman in Oregon history to hold the position.

The state treasurer sits on a number of state financial boards and the State Land Board, which manages state land trusts for the Common School Fund. The treasurer also serves as the central bank for state agencies and manages more than $100 billion in state investments and programs, including Oregon’s Public Employee Retirement System, or PERS.

Steiner said her experience since 2018 serving as co-chair of the Legislature’s powerful budget writing Joint Ways and Means Committee, which writes the state’s two-year budget and makes amendments in even years, makes her well-equipped for the job.

“I think that the experience as a budget writer, of having to make difficult choices about what we fund, will really help me prioritize which programs and which projects to take on first,” she said.

Streamlining the treasury

Among the first projects she’d take on is boosting Oregonians’ financial literacy and creating a single place online where residents could enroll in savings accounts for college, retirement and future care and then monitor their savings. She said she wants to double the number of Oregon kids with a savings plan for post-secondary education and make sure they understand the different types of schools and programs it applies to. Her third priority would be to start a baby bond program for every kid born in Oregon who would get a one time deposit from the state into a savings account that family members could contribute to over time, and that the recipient could access after they turn 18.

“Many Oregonians don’t understand the value of the work that the treasurer does in their children’s lives,” Steiner said. “I really want to educate people across the state, not just about what the treasurer does, but about the ways in which the treasurer can improve their lives and their family’s lives.”

One of the biggest jobs of Oregon’s treasurer is managing the $94 billion PERS fund that’s currently providing benefits for about 140,000 state retirees. The treasurer also manages public banking and savings programs, including the Oregon College Savings Plan and Oregon Saves, a retirement savings program run through the treasury. Steiner helped pass Oregon Saves in the Legislature and has been trying to expand the state’s college savings plan.

State treasurers are elected to a four year term and are limited to two terms during any 12-year period. Whoever wins in the Nov. 5 general election will be the first new state treasurer in Oregon in eight years. The current treasurer, Tobias Read, has served two terms and is running for secretary of state.

Divesting from fossil fuels

It will be up to the next treasurer to begin moving state investments away from fossil fuel holdings following a plan recently launched by Read to make PERS’ investments carbon neutral by 2050 and a bill just passed by the Legislature that directs the Treasury to unload coal-related holdings.

Steiner, who said she was encouraged by Read to run for the job, has read his Net-Zero Plan. She said she would implement its recommendations and try to ensure investments aren’t propping up the fossil-fuels industry, but that there were nuances to such divestment decisions that she would need to study before making decisions.

“We’re also going to have to be thoughtful about balancing a lot of different things,” she said.

She cited the airline Delta as an example of a heavy greenhouse gas emitter but a company with good labor relations and governance.

“How do you balance a company that may, for example, have really high Scope 3 (downstream) greenhouse gas emissions and also treats its employees really well and has great corporate governance?” she said.

The main goal behind everything she would do, she said, would be to grow the PERS fund.

“That’s the fundamental thing that every treasurer has to do,” she said.

by Alex Baumhardt, Oregon Capital Chronicle