N.C. treasurer speaks to city's Rotary Club
By Steve Herring
Published in News on July 22, 2015 1:46 PM
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News-Argus/MELISSA KEY
North Carolina State Treasurer Janet Cowell smiles as she interacts with members of the audience during the question and answer portion of her speech about the long-term state of the economy to the Goldsboro Rotary Club.
Good financial things are happening in North Carolina, but infrastructure, transportation and education are long-range challenges that remain to be met, state Treasurer Janet Cowell told Goldsboro Rotarians on Tuesday.
Ms. Cowell noted that she serves a four-year term as opposed to the two-year terms of other elected officials.
But she said that her job requires her also to think about issues such as road bonds that might have a 25-year life, or pensions that have a 30-year cycle.
As treasurer, she oversees more than $90 billion in pension investments for the more than 900,000 teachers, firefighters and public employees in North Carolina and manages the 32nd largest public pension in the world.
"None of this stuff turns on a dime, so I have this longer-term perspective," she said. "I think that (long term) is where there are more challenges for North Carolina -- more open ended, more of 'where are we going with some of the issues?'"
When political campaigns roll around it is always "pretty predictable," she said.
"The challengers think everything is horrible, and the incumbents say everything is great," she said. "I will say as treasurer, I am an incumbent treasurer, but I have maybe a more nuanced middle-of-the-road perspective.
"I would tell you as treasurer that there are a lot of good things financially in particular in the state. The unemployment rate is down. Revenues are up. Cash reserves have increased."
Also over the past seven years the state has maintained its Triple A bond rating -- just one of 10 states to hold that distinction, she said.
"And the (state) pension is still one of the strongest in the country," Ms. Cowell said. "I would say what makes the treasurer unique perhaps among state officials is that I have a longer-term perspective than typical."
Gov. Pat McCrory is promoting a bond issue to handle some of those long-range issues, but has run into some opposition, she said.
"So it is not completely clear where that is going," she said. "I will say that as treasurer we do the debt affordability study. We tell the legislature and the governor how much money they have. Can you borrow money and still be prudent? Again, protecting that Triple A bond rating."
The state has the ability to borrow safely because of the increasing revenue and cash reserve, she said.
"I have certainly given my blessing to the fact that they can do that prudently," she said. "Whether they want to is ultimately up to the General Assembly."
Ms. Cowell, the first woman to be elected state treasurer, also serves on the state Board of Education.
Education is a major open-ended question, she said.
North Carolina is known for its universities, Mrs. Cowell said.
"Higher education to North Carolina is what oil is to Texas," she said. "It is our crown jewel. It is our reputation."
Ms. Cowell said she is particularly interested in the research and development universities that receive federal and corporate research funding. They are the universities that will be the "seed corn" to creating new businesses and jobs, she said.
Other challenges include providing better salaries for public school teachers and finding ways to help students graduate from college without being burdened with heavy debt, she said.
It is going to worsen, she said.
Beyond offering incentives like the Teaching Fellows program and raising the pay is the articulation agreement with community colleges, she said.
It is cheaper to get two years of credits at a community college before transferring to a four-year institution, Ms. Cowell said.
The current business model for higher education, which is an issue, is that students do not receive credit for a past career, such as someone with a military background, she said.
Articulation agreements make it easier to transfer from a community college to a four-year one, she said.
For example, in Fayetteville an agreement has been signed allowing military experience to transfer into college, she said.
A new phase in higher education is trying to shift to more competency-based learning and "getting away from just time in the seat," she said.
The shift is to whether a student has the skill set to do the job, Ms. Cowell said.
The change in the business model will not happen overnight, but will take 10 to 15 years, she said.
"I am optimistic that North Carolina because of our incredible assets, we do have good economic development potential, that we can control some of the biggest costs out there and that we can continue to invest in education in a way to continue that brand," she said. "I mean that has been such a strong point for us. I just think that departing from that path is one that I certainly don't buy into."