Grossman: Treasurer's job is bully pulpit; has a lot to do with economic health of state. Economy affects vulnerable. We'll not be able to cut our way out of crisis. Use pension funds to create jobs: If banks aren't lending, bring some pension funds together to challenge investment funds to come off of sidelines. Put $ to work with diversified portfolio.
BMG: So does the state become a small business lender? Or nudge others to do so?
State is catalyst to free up capital. I know about business — family business has been around 100 yrs. We've had bond with people in this company. Treasurer can be catalyst: Use small slice of funds to leverage banks for growth of liquidity capital. [State Rep.] Dan Bosley thinks it's a good idea. Want to make sure we take advantage of small business energy in MA. Gov't shouldn't pick winners, but we should convene best and brightest to expand small biz.
Key priority: Financial literacy. Jamie Eldridge chaired Asset Development commission. 40% of people in state live in financial instability. Jamie laid out a vision to improve financial stability. [I think] no young person should leave high school without some degree of financial knowledge. Best practices: SEIU1199 partnered with GBIO & Citizens Bank to teach financial literacy course. Bank set up $400 bank acct for each of those people. We should have [financial literacy] 800 numbers, hotlines, websites.
Welcome Home program: Returning vets get $500 — job of treasurer is to find those vets.
Local aid: Treasurer oversees the lottery — returns $800 mil to cities and towns. Critical for local services, teachers, etc. Sales are declining b/c of lottery.
BMG: Do you support expanded gambling?
Role of treasurer: Gov and lege leaders support expanded gambling. So question is how do we manage it? How do we avoid RI's situation? Lottery sales will be affected as part of expanded gambling. We have to deal with gambling addiction. I was disappointed to see funds cut for gambling addiction treatment — cut from $1mil to $500k. Treasurer should have role.
In 2002 [as Gov candidate] I opposed expansion of gambling. But 20,000 people work in building trades who want to work. So there are thousands of jobs. Joblessness affects the whole person. Gambling — those are decent jobs — some of those 318,000 jobless people need them. I counted license plates at Foxwoods — 38 out of 100 were MA.
BMG: What about the state's debt?
We have $16B of general obligation bonds. Debt rating agencies are OK with that. We're balancing books on the backs of the most vulnerable. We can't take on a lot of new debt. School building authority is under treasurer — money comes from sales tax. Now sales tax revenue is down. SBA barely has enough to pay back old obligations. Schools that need fixing – -can't get done. If sales tax revenues grow, then we can do a lot more for cities and towns and schools. Preparedness is 3rd leg of my candidacy. If they have more money they can have more bonding capability.
(Candidacy is green — wind power from CA, carbon is offset. )
Re: Unfunded pensions: In January (FY2011 discussions) cities and towns' losses will come to bear. Now you have to fully fund your pension by 2030. There's a case to be made to extend those obligations out to 2040. Otherwise you're going to have to choose between funding pension obligations vs. current spending — public safety, teachers, etc. We can't just kick the can down the road — but during this time of crisis, there's a strong case to be made and strong interest among public officials to extend the date out.
Relationship between governor and treasurer has to be close. Support current gov — he's been dealt very bad hand, and you have to make tough decisions. But as treas, it's my obligation to work with CEO of state. When you don't have that relationship that hurts the people of the state.
BMG: Should more muni pension funds be consolidated with state?
Not up to me to deliver a lecture to county and muni pension funds. If they feel the state's performance is better, we're happy to have them. And if you don't perform at certain level, you have to be consolidated.
Not for profits: Spending a lot of money on duplicative services. We could bring together NFP's, cut overhead and focus on service delivery. Newton — all these cultural institutions aren't doing very well, but there's a cultural alliance moving into the same offices. That's wise. Analogy to pension funds — I would advise anyone to look at whether they're performing as well as us, and if they don't think they can do better, or if there's too much overhead, go with us. And if you go for excessive return, you probably took on too much risk.
[Apropos of nothing] … Politics is for me the way to bring strong, vibrant communities. Strategy to win: Start and end with strong community organizing. Howard Dean: People won't accept change until the pain of the status quo exceeds fear of change. Dean even in defeat totally revolutionized politics in America. Up until that point campaigns were command and control. But citizens have to be empowered, that they're maiking their own decisions, that their work on their street is important. Dean gave people a sense of stakeholder-ship. How do you do that? I had 25 young activists at my house. We listened. What a magnificent two hours. Use of new media — but it comes down to people to people.
BMG: What about providing arts and culture $ to cities to create community around arts?
I think the world of cultural entrepreneurs like Carole Charnow. Mass. Cultural Council has been catalyst for that. Anita Walker articulates vision for role off arts in state like MA; we have one of the most vibrant cultural clusters in country. Richard Florida Rise of the Creative Class. We qualify. The cultural space is a winner — it's a magnet.
BMG: Is there a role for an activist treasurer, a la what Eliot Spitzer proposes?
We should use bully pulpit more aggressively. When the average CEO in US makes 500x what average worker makes, then as treasurer I will show up at stockholders' mtgs and vote our values. Hard to know how much impact it will have. We own ~$55B in pension funds, mostly common stocks. Got to be careful — but message on compensation says something to compensation cmtes, to others — that these practices are no longer acceptable. Shouldn't be acceptable to state. Activist values — shouldn't invest in Darfur, eg. That kind of role is one the treasurer should take on — when our values are at stake. It doesn't cost us in the long run. We can find another company to do business. Can be good fiduciary and sensitive to progressive values.