Andrew Lyon For General Treasurer, Part 2
Anchor Rising completes our interview with Andrew Lyon, Republican Candidate for the office of Rhode Island General Treasurer. Mr. Lyon wants to make sure people know what the General Treasurer’s job is not?
I think a lot of people think that the General Treasurer just goes down to the bank, puts some money in, and gets a deposit slip. It’s really a lot more involved than that. The General Treasurer is very important to the fiscal well-being of the state of Rhode Island.Mr. Lyon continues his answer to the previous question about the role of the General Treasurer really does, and the power that the Treasurer?s office has to affect all of Rhode Island?
Andrew Lyon: The General Treasurer sits on the state investment commission. One of the problems with the current boards is there are too many politicians sitting on them. Politicians sitting on investment boards, acting as financial advisors, is not a good thing. That’s one thing I would change. We don’t need people who are owed political favors sitting on our investment boards or advisory commissions. What we need to do is something like Governor Carcieri did four years ago with the big audit; come in, review the operation of the treasurer’s office, check all of the investment advisors, review everything. And we have to change our investment asset allocation.
As the next General Treasurer, I can cure two problems at the same time. If we can identify companies that want to come into Rhode Island, companies that are fiscally sound and are run with good management, we might be able to invest in them, if they come to Rhode Island, through the state pension fund. By helping new companies get a foothold in Rhode Island, we’ll add jobs, we’ll have more wages being paid, and the people receiving wages will pay state taxes. That additional revenue will help reduce the tax-burden, whether its property tax, income tax, or sales tax — maybe we can even get rid of the excise tax as promised year after year — while providing enough money to pay for our social programs.
The problem in Rhode Island right now is the high tax burden and mismanagement of the state offices, excluding the Governor. In the state of Rhode Island, our government is controlled by the General Assembly. It’s a one-party system. Now, you’ve got the wealthy leaving the state with their money because of the high taxes. People graduating from our fine universities and colleges are unable to find a well-paying job and unable to afford a home, so they’re leaving.
The welfare rolls are growing. Rhode Island is one of the most generous states with welfare in the country. We’re ranked either fifth or sixth. Meanwhile, the middle class gets squeezed with taxes to pay for the benefits. Now we’re going to ask the middle class to make up the unfunded liabilities. The bill has come due and we have to face how we plan to pay it.
Anchor Rising: We’ve had an initial start to pension reform passed in Rhode Island in the last year or two. A good start, or not enough?
Andrew Lyon: You have a good plan proposed by the Governor and some members of the General Assembly, but you have other members of the General Assembly, backed by the unions, who don’t like the plan. The union members put a nix on it, so the plan didn’t go through in its original form. It’s a good start, but we need to do more. I commend the Governor and, giving kudos where they belong, praise the current General Treasurer for going along with the Governor in realizing that pension reform was necessary. But we need to do more.
AR: In what other areas would you make changes in what the General Treasurer’s office is doing?
AL: I think we need to make the victims unit a little more accessible. We also need more timely reports from the General Tresurer’s office. The General Treasurer’s is mandated by law to produce reports within six months year of the fiscal year ending. Mr. Tavares’ 2001, 2002, and 2003 were all 18 months late. As far as I know, The 2004 report probably just came out. 2005? Forget it. Who knows where it is. His excuse was that they were updating all of the computer systems. The reports have to be done on time, so the people of Rhode Island have some transparency and know where their money is being invested.
I would change the discount rate. The discount rate in Rhode Island is 8.25%. The national average is 8.05%. In layman’s terms, the discount rate is the expected rate of return on investments. What experts say is that a discount rate that is higher than 8.05% indicates someone trying to downplay their unfunded liabilities — so we might be in worse shape than fourth, though you can’t go much lower. The unfunded liability are equivalent to 96% of the state budget. That spells disaster.
I think Mr. Tavares could have done a better job of picking investment advisors. And I think he should have taken my advice, and changed his asset allocation as market conditions changed. Any good investment advisor will change his asset allocation as conditions change. If the market is going down, you get more conservative. If the market is going up, you get more aggressive. Mr. Tavares hasn’t done that over the last eight years. That’s the reason why our unfunded liability is fourth worst. I don’t blame the current Treasurer for our liabilities being greater than our assets, that is happening to a lot of state and private pensions. But we don’t have to be near the bottom.
We have an older workforce in Rhode Island. They?re going to be retiring soon. As more people start taking their benefits, we’ll have fewer people paying in. What’s being done about this? Has the Treasurer informed the public about this? Do we need to consider having the workers paying into the pension system pay more? Do we need to shut off the current system and change over into a new pension plan, perhaps a defined contribution plan?
We have some very generous benefits for our state workers, and we don’t have a huge tax base in the state of Rhode Island to pay for them. Maybe things would be different if our taxes were low, we had more people that wanted to live here and we had more people paying into the state coffers, but we don’t. People are leaving Rhode Island, because of the excessive tax burden and it’s a recipe for disaster.
AR: What are your qualifications for the General Treasurer’s office?
AL: I am hoping that the people of Rhode Island will take a look at my seventeen-plus years of experience, compared to that of my opponent, and see that they have someone in Andrew Lyon with the right experience for the job. I’ve worked in Chicago, Boston, and New York. Currently I am an assistant vice president at a major bank here in Rhode Island. I am used to analyzing investments. I’m used to making decisions based on analysis and financial data. I’ve been making sound judgments for banks and financial institutions for seventeen years. I want to apply that experience for the benefit of state of Rhode Island. I love it here. My wife loves it here. My family loves it here. We need to make sure Rhode Island is sailing in the right direction, and I want to be a part of that.
AR: Your opponent (State Senator Frank Caprio) got on TV early, but has been running mostly a feel-good campaign that?s light on issues. What would you like to say about your opponent?
AL: From what I know of Mr. Caprio, he is a good person and a good family man. But he?s been in the General Assembly — the same General Assembly that has created our problems with high taxes and political corruption — for fifteen years. His brother is a State Rep.
Mr. Caprio, I believe, is a family attorney. He’s been running ads since last November or December. I look forward to meeting him, debating him, shaking his hand and getting to know him a little bit. It’s always good to have a friendly rapport with your opponent. I expect a good, clean campaign.
What I’m going to focus on my experience, my ideas, and why I’m more qualified than my opponent. My opponent is not the current Treasurer, so he can’t be blamed for the current deficiencies. But my goal is to make sure that the people of Rhode Island have a clear choice between a political insider without any financial or banking experience and myself.
I’m not a political insider and I have the right qualifications to be General Treasurer. Rhode Islanders need to make a decision about who they trust more. Hopefully, they will look at me and see that I have the experience that Rhode Island can trust. We’ll see what happens on November 7.