Senior Interview Editor Ingrid Stegemoeller talked with Dr. Wolfgang Opitz, Washington’s Assistant State Treasurer. They discussed the role of the office and the impact of the recent economic downturn.
Georgetown Public Policy Review: The Office of the State Treasurer in Washington state manages state debt and invests state and local funds, among other responsibilities. Talk about your role as the assistant treasurer.
Wolfgang Opitz: In Washington state, our state treasurer is one of nine separately elected officials. He’s elected statewide, and he appoints an assistant treasurer, as well as deputy treasurers, to run his office. One of the roles is to act as the treasurer if, for some reason, he’s not able to. The main thing I do is serve more like chief of staff for the office—coordinate work across the office as well as the relationship of the office to others. That includes working with the legislature, local governments, our Congressional delegation, and our other statewide elected officials and staff at these levels—put the pieces together. I serve as the treasurer’s “general contractor” if you will.
GPPR: You have a great deal of experience with Washington state’s budget. How do the economic challenges facing the state today compare with economic downturns of the past, in terms of its effects on revenue and spending?
WO: They’re incomparable. Of all the other economic downturns that we’ve experienced, we used to think the worst it would be was an ’81-’83 sized recession. This one isn’t even close. We’re in something now that is very different, not just in this state but nationally. Some people talk about it as a reset, which I think still understates the scale of what we’re in. We’re in a space like the 1930s, but there are many more buffers in place now, many more tools that government can use to help—including unemployment insurance, food stamp programs, and public benefits—that are softening the blow on the general public. Were it not for those programs, we’d have bread lines and 25 percent unemployment.
GPPR: Can you talk about any “creative” actions your office has taken in the past few years to counteract the economic downturn?
WO: To achieve many of [the accomplishments of the past 3.5 years], we had to come into office in January 2009, quickly look at very old, antiquated statutes the legislature had created for the way it wanted to manage the state’s debt and how it wanted to exercise its oversight. We needed legislative help to remake state law to get the agility we needed so that we could exercise good judgment. And we got it – first regarding how we manage and protect public deposits, which we’re involved in heavily in our agency. When a bank closes and there’s public money in it, we’re involved. We need to work confidentially with banking regulators so we had to get the law changed to let us do that. We also needed to make over the statutes to get the agility to enter the bond market the way we do so we can save money on new bond sales and refinancings. When you read about the $1.4 billion in savings from new sales coming in better than projected and refinancings, I can’t tell you what portion of the savings are the result of the agility alone, but it’s likely in the 20 to 30 percent range. Absent the agility, we would have just been run over by the market. We would have missed opportunities, all because it was too hard to get the schedules to mesh for the governor, lieutenant governor, and treasurer—who form the state finance committee—so they could be in the same room to sign off on the morning of the bond sale. Talk about antique. You could have that process bronzed. We didn’t ask the legislature for much, we just asked permission in the law for the state finance committee to delegate to the treasurer the administration of each bond sale. The legislature was a bit worried about delegating authority, but when we showed them some examples of what we could save them they asked where to sign—and away we went. A big part of what we’ve been able to do is get out of the way of big states like California when it’s headed into the market. Or jigger our schedule late in the bond sale process, say within 8 or 10 days of the actual sale, to get into the market even a couple hours ahead of another big state like Minnesota. We needed to be there first, which let us set a benchmark for the market rather than be affected by a possible oversupply that hits just before us. It’s kind of weird to describe and hard to really appreciate, but there’s an awful lot of creativity that goes into putting to use what the legislature has given us.
We brought the legislature bills, we worked the bills, got the governor’s support, and got them in place. We did the same kinds of things in investments, and in cash management and operations. So we’ve gone through and really gotten the latitude to function in today’s market. Not to run amok—because we’ve always put bumpers, reporting, and transparency requirements into the statutes. We’re happy to include those requirements—reporting out, posting on the website, and showing what we do. Partly for communicating to the bond market and investors, but more importantly to communicate to the legislature, the public, watchdog groups, other elected officials, local governments, anyone that wants to look—what we do, how we do it, and to what effect.
GPPR: What advice might you give to young people interested in state policy work?
WO: Wear a helmet. It’s hard. I think it’s hard in good times. I’m not going to say enter into it cynically, but enter into it with both eyes open. There’s a lot to it. There’s an awful lot of value in working in government, especially in state government. It’s very positive—it’s especially positive when you have great relations among staff that isn’t based on partisan lines or government branch. It’s very much a community of common interest here in Olympia, where people work together and are really trying to be creative and smart about things. It’s an awful lot of fun from that point of view.
It’s so hard because the public at large has been told for 40-plus years, maybe longer, that government gets it wrong, it’s wasteful, and can’t be trusted. That story’s been told so often, so much, in so many ways that I think that game is over in a lot of respects for a generation or two. So you need to know going in that public recognition is not where you really ought to look for your positive feedback. But if you’re looking for it in terms of really smart, creative solutions, things that are fun to work on, where there’s an intersection of the political, policy, and practical, where you want really good colleagues at every level of their career—it’s a very rewarding place that way.
Established in 1995, the Georgetown Public Policy Review is the McCourt School of Public Policy’s nonpartisan, graduate student-run publication. Our mission is to provide an outlet for innovative new thinkers and established policymakers to offer perspectives on the politics and policies that shape our nation and our world.
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