On April 3, Wisconsin voters will be asked if they want to remove the office of state treasurer from our state’s Constitution. Should this amendment pass, Wisconsin would be the only state without a treasurer or financial equivalent, a position that provides a critical check on the state’s executive and legislative branches.
I will be voting “no” against removing this office, and here’s why:
As a former management consultant and now impact investor, I would never advise a client to invest in a business that did not have a separate financial office. Getting rid of the state treasurer is equivalent to a company firing its auditor and chief financial officer and handing those duties to its CEO. A well-run business would never do this, so why would this be good for Wisconsin?
Wisconsin’s treasurer oversees financial transactions by government officials, signs checks and helps oversee four trust funds worth more than $1.2 billion. The proposed amendment completely removes the first two duties and gives trustee responsibility to the lieutenant governor.
Through one referendum, we could lose our fiscal watchdog, create an undue concentration of power within the governor’s office, and threaten the financial integrity of our trust funds.
Having a state treasurer is essential to our system of checks and balances. It is one way to protect against abuses by the governor and Legislature, as they determine the tax rate and collect and spend tax money. A 2016 fraud study found that weak internal controls were an underlying factor in three-fifths of the fraud cases it examined. Removing this office is like rolling out the welcome mat to fraudsters, and saying “Come on in!”
The treasurer is an ideal trust-fund custodian, because the office is not involved in the state budget process run by the governor and Legislature. Our founding fathers created a system that minimized any conflict of interest. And this system has been working for 170 years!
In 2017, the Common School Fund distributed $32 million to public school libraries, and the Normal School Fund has a principal of more than $28 million and provides thousands of dollars to the UW System. Further, the State Trust Fund Loan Program provides financing opportunities for projects such as public safety, water treatment, and unfunded, prior-service pension liabilities. Every county in Wisconsin has benefited. Why would we mess with that?
Finally, the treasurer’s office oversees the state’s financial transactions. Eliminating this role would risk damaging the quality of our audits. Failed audits often have pricey consequences that we, as taxpayers, would have to cover.
For example, the state could lose its federal funding if it fails to spend federal dollars appropriately. Federal funds account for almost $9 billion — 27 percent of our state budget. If our bond rating is lowered, it increases our cost of borrowing and deters investment. Don’t we want to attract good investments to Wisconsin?
Removing the office of state treasurer would have an impact felt for generations. Vote no on April 3 and protect Wisconsin’s fiscal watchdog.
Sarah Godlewski is the co-founder of an impact investment venture called MaSa Partners and is from Eau Claire, Wisconsin. This column was distributed by the Progressive Media Project, affiliated with The Progressive magazine.