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Power-stripped Treasurer’s office

120 years in the making

By Melinda Wheeler

James William “Honest Dick” Tate celebrated his 21^st year as Kentucky State Treasurer by robbing the state treasury of some $250,000 and disappearing south into Latin America.  All that was left in the state vault was a note from Honest Dick and a baby’s high chair.

Three years later, in 1891, as a result of Tate’s infamous plundering of the state treasury, Kentucky voters approved a referendum that banned constitutional officers from succeeding themselves. 

Since that time, the Treasurer’s office has been steadily marginalized with responsibilities stripped away. Perhaps problems with ethics and personal matters of former Treasurers such as Tate, Frances Jones Mills and John Kennedy Hamilton contributed to the General Assembly’s diminishing the Office of Treasurer.

Reality of it is the Treasurer no longer is the Commonwealth’s chief financial officer.  In fact, only two substantive functions remain for the Treasurer:  writing checks and running the state’s unclaimed properties program.

Compared to state treasurers in surrounding states, Kentucky rates last in responsibilities.  Treasurers in Kentucky and West Virginia, according to a 1999 survey conducted by the Kentucky Gazette, were the only state treasurers with absolutely nothing to do with state investments.

Go to websites of other state governments and you will see the functions of treasurers in other states, such as Tennessee, Ohio, Illinois and Indiana, have significant constitutional authority. Without this authority, however, they would be in the same position as Kentucky’s State Treasurer, or one of trying to justify its own existence.

State legislatures in Florida and Texas in recent years absorbed their state treasurers’ functions into other related offices, such as the Office of State Comptroller in Texas.  Both states abolished the office of treasurer.  Florida went so far as to combine several financial and regulatory offices under one roof, creating the Office of Chief Financial Officer, or CFO.

Steve Beshear has gone on record supporting my position, as well as Governor Ernie Fletcher.  Beshear endorsed the idea in 1986 after his blue ribbon panel on constitutional reform advocated abolishing the Office of State Treasurer.

Kentucky voters in recent years have established a precedent for supporting the elimination of constitutional offices that have seen their better days, including:  Superintendent of Public Instruction, Railroad Commissioner and Clerk of the Court of Appeals. In other words, Kentuckians understand the issue better than many politicians.

What’s important for Kentuckians to consider is the cost of redundant government. Our Office of State Treasurer costs taxpayers $3.2 million a year to operate and pay its 33 employees. 

This may not sound like much money to some, but it represents a significant savings when you consider how we could commit these dollars to local communities whose budgets are stretched thin by emergencies and other unplanned costs.

If the General Assembly could appropriate that money elsewhere, such as for higher education grants for kids from disadvantaged homes, the accumulated investment would be significant. 

Of course, some people claim we wouldn’t save any money by abolishing the Office of Treasurer, that the functions of printing checks and running unclaimed properties will continue with people necessary to work them. 

It’s naïve to believe that there can be no benefit of efficiency in government.  Combining work functions in allied departments has been a successful government administrative practice for decades.  I should know; I worked in the state’s court system for 30 years and have firsthand knowledge of how to maximize efficiency in the work place.

Men and women who now work in the Office of State Treasurer need fear nothing from the abolition of the office.  It’s my concern that the individuals who work in this office are given every opportunity to transfer into the state government work force as a means of transitioning the functions into another department within the Executive Branch.

Government functions best when it is dynamic and adapts to change, especially how people transact their business, both personal and professional.  For instance, most people today prefer to have their paychecks electronically deposited into their bank accounts.  It’s a tried and true way of doing business. 

The Office of Treasurer should move toward maximizing electronic fund transfers, both to state workers and state vendors.  We saved tens of thousands of dollars each year at the Administrative Office of the Courts when we adopted a strict policy of electronic fund transfers. Just think how much the Commonwealth would save if we adopted a similar policy.

As far as financial literacy, something candidates for this office have espoused this year as their justification for keeping the Treasurer’s office, there are programs sponsored by national and local non-profit groups. The United Way, YMCA, Junior Achievement, and the JumpStart Coalition provide this service to thousands of Americans.  These are only a few organizations offering financial literacy instruction and help. Certainly, another department in the Executive Branch will want to absorb this function from the Treasurer.

What we, as candidates for public office, should practice in the way of financial literacy is always be on the lookout for savings and efficiencies with the taxpayers’ money.  We should lead by example, and there’s no better example of good financial stewardship than trimming departments in government that no longer are necessary.  Let’s start with the Office of State Treasurer.

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Melinda Wheeler, candidate for Kentucky State Treasurer, until last December worked as Director of the Administrative Office of the Courts.  She began there as a pretrial officer in 1976 and served the state’s court system for over 30 years.  She and her husband, Ed Crockett, live in Georgetown KY.  They have two daughters and three granddaughters.

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