The race for state treasurer pits incumbent Democrat and former venture capitalist Rob McCord against five-term Washington County Republican commissioner Diana Irey Vaughan and Libertarian Patricia Fryman, a retired Venango County auditor.
Although known for holding a low-key state office, the treasurer is expected to face tough fiscal decisions over the next four years, especially as policymakers come to grips with the commonwealth's growing pension crisis.
The current governor's refusal to raise taxes, coupled with slow economic recovery, will make that job even harder.
The treasurer manages more than $120 billion in state assets and oversees the pension funds for public school employees and state workers. Those funds, which are expected to be under the microscope as part of reform debate in 2013, have combined unfunded liabilities of more than $41 billion.
"It's the treasurer's responsibility to be the person standing up there and making the tough calls," she said.
The treasurer sits on both the State Employees' Retirement System board and the Public School Employees' Retirement System board.
She promoted a conservative approach to investments. Her broad plan focuses on decreasing general fund debt, simplifying investments and eliminating high fees, as well as "responsibly" funding the state retirement plans.
"I think you have to have a long-term goal for investing," Vaughan said. "I don't see that now."
McCord said he has pushed for pension reform with little success.
The bulk of the debate has centered on moving to defined-contribution plans, or a 401(k)-style approach, from the defined-benefit plans, which leaves the accumulated liabilities unpaid while addressing new employees.
"To cap or limit the liability is important," McCord said. "The unfortunate thing is that people try to give an incentive to move into a defined-contribution plan. We could end up with even weaker retirement plans."
The former business leader said the challenge is finding the right type of hybrid model. He said he believes market risk should be shared by the employer and employee.
McCord has called his Republican challenger's campaign one of "politics by talking point."
He said he is proud of the $650 million capital bond issue he signed off on at the end of Gov. Ed Rendell's second term. The former governor had proposed $1 billion, but McCord fought to reduce the bond.
"I have no say on the line-item projects. The only thing I can see is if the debt is legally owed and try to reduce the cost of debt as low as I can," he said.
Funding the PA 529 College Savings Program has increased to 98 percent from 70 percent under McCord's leadership. McCord also highlighted a 19 percent reduction in office personnel and improved performance in the Bureau of Unclaimed Property, which has generated more than $316 million for the general fund since the beginning of 2009.
McCord said he has brought "common sense business solutions and business metrics" to the office, which has measurably ramped up productivity and profitability.
Fryman said she decided to run because she is dissatisfied with the government and the patronage that exists in the Republican and Democratic parties.
"If you want to see a change, you most often have to be a change," she said. "I feel like it's time to have a third party take a look at these things."
State government does not have enough checks and balances, Fryman said.
She said reducing the pension of lawmakers would be a priority, along with working to curtail the size of the government.
"My main goal is to question spending," she said. "I don't want to just sign checks. Why are we spending this much? Why is this going on like this? I think government agencies need more audit oversight."
Candidates for state treasurer
Incumbent: Rob McCord, Democrat: The 53-year-old Montgomery County resident is seeking a second term. Prior to his election, McCord helped run a variety of venture capital operations. He also led the Eastern Technology Council, a trade association that served hundreds of innovative companies. He is married with two children.
Republican challenger: Diana Irey Vaughan: The 50-year-old Washington County resident is a five-term county commissioner. She has helped lead various economic development efforts, including a public-private partnership with the Washington County Chamber of Commerce. Vaughan is married with three children.
Libertarian challenger: Patricia Fryman: The 63-year-old Venango County resident is a retired county auditor with 30 years of business and banking experience. She is married with two children.