By Len Lazarick
State Treasurer Nancy Kopp is expected to be easily re-elected to another four-year term by a joint session of the General Assembly this morning after she was easily renominated by a special legislative committee late Wednesday afternoon.
Four candidates had applied for the post that manages the state’s finances and debt, but only two showed up to be interviewed by a nine-member committee – Kopp and William Campbell, the Republican nominee for comptroller in last year’s election.
In a secret ballot after a meeting that lasted only half an half, Kopp, a former Democratic delegate from Bethesda, got seven votes and Campbell, the former chief financial officer for Amtrak and the U.S. Department of Veterans Affairs, got two. Kopp, 67, has served as treasurer since 2002.
Campbell emphasized the need to fix the state’s pension system and, by the state’s own accounting, its unfunded liability of $18 billion. Outside experts on pension reform such as the Mercatus Center at George Mason University in northern Virginia say Maryland pension liabilities are actually much higher.
Campbell said the pension liabilities could ultimately affect Maryland’s Triple A bond-rating, which was just reaffirmed Wednesday by all three rating agencies in preparation for $485 million bond-sale March 9.
In its Feb. 18 credit report, Moody’s Investor Services again sounded warnings about the state’s high debt burden and pension system.
“The state’s retirement system funded levels represent a credit challenge for the state,” Moody’s said. “The current funded level is low at about 63% as of June 30, 2010 … and is at a level lower than most similarly rated states.”
Campbell said the state should turn to a defined contribution pension plan like a 401(k), and lower its estimated annual rate of return on its investment from 7.75% to 6.5% to better reflect the realities of the financial markets.
Kopp, who serves on the board of the retirement system and also on the pension sustainability commission, said she agreed with Campbell “completely” that the state had not been funding its pension program sufficiently.
“There’s a long way to go to make up for that unfunded liability,” Kopp said.
Besides managing the state’s money, the treasurer also serves as the legislature’s representative on the three-member Board of Public Work that awards billions in state contracts.