<\/p>\n
Eleni Kounalakis\u2019\u00a0considerable diplomatic skills could make the state treasurer\u2019s office more effective and efficient, the editorial board says.\u00a0<\/p>\n
Lea Suzuki\/S.F. Chronicle<\/p>\n
Being California state treasurer isn\u2019t a sexy job. Few politicians\u2019 eyes light up at the idea of leading the state\u2019s Debt Limit Allocation Committee \u2014 just one of the dozens of committees and boards<\/a> on which the treasurer plays a key role.\u00a0<\/p>\n Yet the treasurer is the main banker, financier and asset manager for the world\u2019s fourth-largest economy\u00a0\u2014 an immense responsibility.<\/p>\n The job involves financing public works projects \u2014 such as schools, parks and transportation infrastructure \u2014 and awarding funds for affordable housing and student loans. The treasurer also serves on the boards of the California Public Employees\u2019 Retirement System and the California State Teachers\u2019 Retirement System \u2014 two of the world\u2019s largest pension funds that together<\/a> manage nearly<\/a> $1 trillion\u00a0in assets.<\/p>\n Article continues below this ad<\/p>\n The Chronicle editorial board has begun rolling out its endorsements for California\u2019s June primary election. In the weeks to come, we will publish our assessments of all the state races, including the governor\u2019s race, plus local races and ballot measures. To read more about how the editorial board makes its election endorsements, go here<\/a>.<\/p>\n Plus: Look out for the Chronicle\u2019s Voter Guide to publish in early May, as ballots get mailed out across the Bay Area.<\/p>\n Being treasurer obviously demands a leader who is fiscally savvy and detail-oriented. But collaborative skills are also crucial. The state will soon begin implementing a reorganization plan spearheaded by Gov. Gavin Newsom<\/a> to create a new state housing agency<\/a>, which will streamline affordable housing financing programs already under the governor\u2019s control. Newsom has also introduced a bill to assume control of some funding administered by the treasurer\u2019s office \u2014 a proposal that\u2019s\u00a0divided<\/a> affordable housing advocates<\/a>.<\/p>\n The next treasurer can and should be involved in these negotiations to ensure California\u2019s precious affordable housing funds are administered fairly, transparently and efficiently.<\/p>\n San Francisco Chronicle Logo<\/p>\n Make us a Preferred Source to get more of our news when you search.<\/p>\n <\/p>\n Add Preferred Source<\/p>\n <\/a><\/p>\n Six candidates<\/a> are running to replace Fiona Ma, who\u2019s termed out. Two Democrats stand out.<\/p>\n Article continues below this ad<\/p>\n State Sen. Anna Caballero of Merced, a former state Assembly member and mayor of Salinas, knows how to run a large government agency. When he was governor, Jerry Brown appointed her to lead his newly created state Business, Consumer Services and Housing Agency, where she oversaw a $27 billion budget and managed 16,000 employees.<\/p>\n Caballero has meaningful experience in other areas overseen by the treasurer. She was a principal author<\/a> of a 2023 law that created a $300 million fund \u2013 administered by an authority housed in the treasurer\u2019s office<\/a> \u2013 to prevent financially challenged nonprofit and public hospitals from closing.<\/p>\n Last year, Caballero authored\u00a0a bill<\/a> to create a nonprofit organization within the treasurer\u2019s office that would leverage private-public partnerships to finance housing and transportation projects. But that bill\u00a0\u2014 which hasn\u2019t cleared the Legislature\u00a0\u2014 raises serious questions about how Caballero would steward public dollars. The initial draft exempted almost all records from public disclosure<\/a> and contained no limits<\/a>\u00a0on the amount of debt the nonprofit could take on, with nothing to backstop it if it were to collapse.\u00a0<\/p>\n Caballero said she \u201ctook the transparency issue very seriously\u201d and amended the bill to permit most records to be released. She said the bill was intended to help the state finance important but higher-risk infrastructure developments, such as hydrogen power generation and carbon capture projects.<\/p>\n In our interview,\u00a0Caballero had an almost singular focus on hydrogen power \u2014\u00a0an expensive and unproven technology<\/a>. We worry this could lead the state down a fiscally perilous path. Caballero also displayed a concerning lack of knowledge about Newsom\u2019s housing reorganization plan \u2014 she said the Legislature \u201cnever had a hearing\u201d on the proposal, although\u00a0it in fact did<\/a>.\u00a0<\/p>\n Article continues below this ad<\/p>\n The other top contender is Eleni Kounalakis, the state\u2019s lieutenant governor.\u00a0<\/p>\n At first glance, the treasurer role seems like a step down for Kounalakis, the former U.S. ambassador to Hungary under President Barack Obama, who last year dropped her longstanding gubernatorial bid<\/a>. But she made clear in our interview that the technical aspects of the treasurer\u2019s office appealed to her after years of \u201cstanding in front of a podium with a visiting dignitary.\u201d<\/p>\n Kounalakis made a convincing case for how she could leverage her considerable diplomatic skills to make the treasurer\u2019s office more effective and efficient. For affordable housing projects stuck in political logjams, \u201cI will pick up the phone and call any city planner and call any elected official and call any community group \u2026 to move things forward\u201d \u2014 a realistic promise, given her development background as president of a real-estate company founded by her father. Similarly, she intends to build a \u201ctrusting relationship\u201d with bond agencies to improve California\u2019s rating, which could save the state hundreds of millions of dollars.\u00a0<\/p>\n Kounalakis\u2019 background in finance and human rights should also allow her to forge compromises on California\u2019s pension boards, which face perennial calls to divest despite concerns that such changes could put workers\u2019 retirement benefits into jeopardy.<\/p>\n With her thorough grasp of the treasurer\u2019s complex duties and the political gravitas to get things done, Kounalakis deserves your vote.\u00a0<\/p>\n Article continues below this ad<\/p>\n The editorial positions of The Chronicle, including election recommendations, represent the consensus of the editorial board, consisting of the publisher, the editorial page editor and staff members of the opinion pages. Its judgments are made independent of the news operation, which covers the news without consideration of our editorial positions.<\/p>\n Also running is Tony Vazquez, a Democratic member of the\u00a0state Board of Equalization<\/a> who pledged to invest state pension funds locally, with little mind to returns: \u201cI don\u2019t think it\u2019s a bad thing if we take a hit on that,\u201d he told us, which we view as immediately disqualifying.<\/p>\n The remaining contenders are Glenn Turner, a Green Party candidate who wants to establish a public bank; Republican businessman David Serpa, who pledged to launch a \u201ctax rebellion\u201d; and Jennifer Hawks, a Republican and retired businessperson who declined our interview request.<\/p>\n