Our choices for N.C. treasurer, secretary of state

The Observer editorial board


The Democratic primary for N.C. treasurer offers voters one of the most intriguing decisions in the 2016 election. The race’s two candidates – Dan Blue III and Ron Elmer – not only would bring different backgrounds to the office. They have dramatically different ideas on how the treasurer’s job should be done.

The winner faces Republican Dale Folwell, the former Employee Security Division leader who is unopposed in the primary. Current treasurer Janet Cowell announced last year that she would not run for re-election.

The treasurer’s office oversees the State Health Plan and manages the state retirement system’s pension fund, which is a $90 billion portfolio of equities, bonds and other investments.

Blue – the son of longtime state Sen. Dan Blue Jr. – is a Raleigh attorney with some but not much investment experience. He also was founder and former executive director of the Pharmaceutical Institute, a Raleigh healthcare consultant.

Blue, who has been endorsed by Cowell, would continue the treasurer’s office practice of hiring third-party investors to manage the pension fund’s stocks, which make up almost half the overall pension fund portfolio. Bonds, which make up a third of the overall portfolio, are managed in-house.

Elmer, a Cary financial planner, believes the treasurer shouldn’t rely on those outside investors – and shouldn’t pay millions in fees to them each year. He proposes converting the pension fund to an index fund, which would be run by a team of six employees in the treasurer’s office.

Doing so would save the state at least $100 million a year, he says.

Elmer has the background to make it work. He’s managed investments for BB&T, First Citizens Bank and pharmaceutical company Warner-Lambert. Those investments include a $2 billion stock index fund for the North Carolina pension fund. “This is what I’ve done as a career,” he told the editorial board.

Others also believe Elmer’s plan can work, including N.C. State professor of finance Richard Warr, who said Elmer could save the pension fund more than $500 million annually. The State Employees Association of North Carolina, which has an obvious interest in the pension fund’s success, has endorsed Elmer.

The treasurer also has other duties, including offering fiscal advice to state and local government. Elmer’s financial experience, which includes teaching college-level classes and writing books on investing, certainly qualifies him for those tasks, too. But his pension fund proposals stand out. Even Blue won’t dismiss Elmer’s ideas, telling the editorial board they are worth investigating. We agree. Elmer deserves the nod in the Democratic primary.

Secretary of state

Funeral home company owner A.J. Daoud and consulting firm owner Michael LaPaglia are vying in the Republican primary for Secretary of State. The winner advances to face incumbent Democrat Elaine Marshall in November.

Daoud makes the stronger case of the two primary candidates. Daoud, who lives near Pilot Mountain, is making his second run at the office. He owns a string of funeral home businesses and was once vice president of a public funeral services company, supervising a $16 million budget.

He shows a strong grasp of the challenges facing small businesses. He said he would make the Secretary of State’s office more customer-friendly by improving its website and streamlining paperwork requirements.

Of the candidates, his party roots are deeper. He served as a lottery commissioner and as the GOP’s 6th Congressional District chairman. LaPaglia shows admirable passion for helping small businesses, but his resume is thinner than Daoud’s.