Election Results
The original story, published Nov. 3, continues below:
Republican State Treasurer Roby Smith said about $150 million in state money was temporarily invested in Iowa banks when he became state treasurer four years ago.
“I’ve increased that to over half a billion dollars,” Smith said. “That’s a 200% increase.”
The State Treasurer of Iowa invests taxes as soon as they’re paid to the state and withdraws the funds when they’re scheduled to be spent. In the last fiscal year, Smith managed $10 billion in state tax collections in temporary investments.
“In the treasurer’s office, it’s a scoreboard business, and we put up record numbers,” he said. “I managed $10 billion in the state idle money fund and we have brought in over $1 million a day in interest, an all-time record. To put that in perspective, the previous state treasurer, his last four years brought in $100,000 a day.”
John Norwood, the Democrat who’s challenging Smith’s bid for a second term, said with the state collecting $10 billion in taxes, investing just $1 billion of that in Iowa financial institutions isn’t enough.
“Keeping more of our Iowa taxpayer money in Iowa, working through our Iowa banks and credit unions is an incredibly important part of this job,” Norwood said. "Banks and credit unions make… loans based on deposits. Deposits help grow the economy. If that money leaves the state, it’s a lost opportunity to grow our Iowa economy, which happens to be in the tank.”
Differing views on IPERS
The candidates also have different views on the process used to hire the person to oversee the state-run pension system. Gov. Kim Reynolds recently appointed a new CEO for the Iowa Public Employees Retirement System (IPERS). The previous CEO resigned and another top administrator was fired this spring after an investigation into alleged misconduct.
Norwood said the pension fund’s board of directors should be involved in selecting the CEO of IPERS.
“We have a CEO that isn’t hired and fired by the board. That’s not in step,” Norwood said. "The mismanagement issues are a reflection of the issues of the governance.”
The head of IPERS used to be hired by a state agency director. A 2003 state law gave governors authority to appoint the IPERS CEO, then two-thirds of state senators have to confirm the appointment. Smith said that process has been used when both Democrats and Republican have been in control of state government.
“It is something that has worked,” Smith said. “When I came here in 2011, as state senator, IPERS was funded at about 80%. Today it’s funded at 94.5%.”
Reynolds has said there were no financial issues involved in the alleged misconduct that led to the firing and resignation of two IPERS executives. Norwood cited the lawsuit filed by an IPERS employee who was fired and claims investment returns have been inflated.
“Right now, though, we don’t have an independent investigation. We don’t really know the depth of the issues because that has all been swept under the rug,” Norwood said, “And the investigation is internal to the executive branch.”
Smith said his focus is on maintaining the long-term strength of IPERS.
“We are a top 10 pension, but what’s most important is we need to keep the promise to current and future retirees,” Smith said.
