The office of the general treasurer of Rhode Island is currently occupied by 35-year-old Bristol native Seth Magaziner, an investment professional who was elected in a 2014 landslide victory based on his platform to deliver fresh energy and keen insight to Smith Hill. Through diversifying the state’s investment and economic development strategies, his proposal for a massive public school improvement plan, and an improved outlook in the state’s often beleaguered pension fund, Treasurer Magaziner has delivered on many of the broad goals he set forth to accomplish four years ago, and that is the message that drives his re-election bid as the calendar moves toward November.
During a recent episode of The Bartholomewtown Podcast recorded at the Rhode Island State House, Treasurer Magaziner offered a glimpse into the scope of his office’s work, and how the sundry programs he has developed aim to improve statewide economic development, as well as improve the financial outlook for individuals, families and small businesses throughout the state.
Bill Bartholomew (Motif): What’s your day like as general treasurer?
Seth Magaziner: At a basic level I get to go to work every day and help people. This is public service, and I take that idea very seriously. I was elected because people, I think, were looking for a state treasurer who would bring some new ideas and find ways to use the office to strengthen the economy and make a difference in people’s daily lives. A good 40-50% of my day is spent working on new ideas and new initiatives in the vein of helping to promote economic growth and strengthen families’ financial security.
Among the programs that the treasurer has overseen, Bank Local appears to have had an immediate impact, helping more than 200 small businesses obtain capital that they previously wouldn’t have had access to (see story motifri.com/banklocal). Bank Local is an initiative intended to “bring home” millions of dollars of state-held cash by allocating away from out-of-state institutions and into in-state credit unions and banks, and it has accounted for increased access to capital for small businesses. By providing local banking institutions with additional capital, small businesses are able to obtain loans to expand employment and infrastructure, something of particular note given that small businesses make up 90% of the state’s economy.
Treasurer Magaziner spoke passionately about what he termed a “once in a generation investment repairing Rhode Island’s public schools”, referring to the multi-year, massive overhaul that he has proposed, and that will be a referendum on the ballot this November. “Every child deserves to go to a school that is safe and warm and dry and equipped for 21st century learning. Unfortunately, today we have many school buildings where that is not the case,” he said.
The treasurer’s résumé includes time in the trenches of the finance industry, including Point Judith Capital, co-founded by Governor Gina Raimondo, and it was clear that he is applying his experiences in the field directly to his office’s approach to managing the state’s pension fund, which recently reported growth in excess of 8%.
BB: How much of your experience are you applying to how you’re operating this fund?
SM: A lot. Every Rhode Islander deserves to retire with dignity, especially those who have spent their lives serving the rest of state. Whether it’s as public school teachers or first responders, social workers, other public employees deserve to have comfort and predictability in their retirement. That’s why its so important that we have the pension fund performing well. Historically in Rhode Island the fund has struggled. There were a whole series of reforms in the past and so on. Now, my focus is on making sure we deliver strong performance for the pension fund so that the pension fund gets stronger and that we never have to do another one of those reforms again. Two years ago we launched the Back to Basics plan for the pension fund. We are moving money away from hedge funds and some of the other high fee, lower performing investments that we’ve been in before and moving toward a more traditional investment strategy. And it’s working. The pension fund is finally moving in the right direction.
BB: In terms of just macro right now, do you feel like we’re in a good economic situation nationally and globally, and are you able to use that to your advantage as you oversee these funds?
SM: At a global level, we are now eight to nine years into a national economic recovery, which is certainly helpful for the pension fund and for the state in general. Unemployment is low, inflation has been low. So that’s all good. I am concerned about our outlook from here. I think we have real issues with income inequality, that if we do not address those, it will come back to bite us economically, politically, socially, so that is a challenge. I think that the volatile nature of our leadership in Washington D.C. is also not particularly helpful and does lead to volatility in the stock market among other things. So, generally speaking, globally and nationally we are in a period of economic growth, and now since 2009, 2010, that’s all good. But I think that there’s still cause to be cautious about what the outlook is from here. So when it comes to investing the pension fund, for example, part of our strategy is to allocate a portion of the fund [in ways] that are more defensive investment strategies to protect us the next time there is a downturn. Our basic strategy is we’re diversifying.
BB: Outside of defense what are some of the larger industries you’re trying to attract to Rhode Island, or even already exist here?
SM: I think that what you really want to have a strong economy in a state is an economy that is diversified. [What] We ought to be shooting for is to bring employers into Rhode Island and to expand employers across a range of different sectors. That can be healthcare, that can be IT and tech, that can be the marine and defense industry, but the common denominator across all of those is that you want these to be jobs that high-value-add — jobs that pay good wages. To the extent that the state has incentive programs to try to encourage companies to move to Rhode Island or expand to Rhode Island, I think it’s very important that those incentive programs be targeted at those high-value-add industries that have higher wages. We don’t want necessarily be subsidizing call centers that pay low wages and that are at risk of being disrupted by new technology in the future.
BB: You’re two-for-two in terms of your 2014 Democratic primary and general (election) wins.
SM: Yeah, I ran in 2014 for general treasurer, and it was my first time running for political office, and I won a primary and then a general. Now, I’m running for re-election and hoping to do another tour of duty and continue the progress we’ve made.
BB: You have a broad base of support both within the Democratic Party and statewide. What does that feel like?
SM: I don’t think it’s about me. I think it’s about the ideas that we’re running on and the priorities we have. I have been very pleasantly surprised at how, even with all of the craziness in politics and all of the negativity in politics, it’s possible to get things done when you’re in office if you work hard. It’s not like we came in here with all of these big ideas and haven’t been able to get any of them done. We have actually gotten things done, and that to me is very heartening, because it’s easy to be cynical about politics, it’s easy to be cynical about government, but if you come in and you work hard and you have the right priorities, it is actually possible to accomplish things that make a difference in people’s lives.