PEORIA, Ill. (WMBD) — Announcing a run for re-election, Treasurer Michael Frerichs is going for a third term.
Touting state investments, a college savings program, and his retirement program called “Secure Choice,” Treasurer Michael Frerichs said there is more work to be done.
The Treasurer was elected back in 2014, and sworn into office in 2015.
He joined WMBD’s Matt Sheehan in-studio for On the Record to discuss his campaign, what’s been done in his first two terms, and what challenges Illinois currently faces.
Question: Take me back to when you were elected. What were Illinois’ finances like?
“Illinois has had challenging financial issues for quite a while. That’s why when I came in, we focused on increasing investment returns. We know that every dollar we could make is a dollar the governor and General Assembly don’t have to raise in taxes. It’s a dollar in cuts they don’t have to make in schools, universities, roads or bridges,” Treasurer Frerichs said.
Question: Fast forward to today. What have you seen change over the years and what has improved?
“When I took this office over, we had a college savings program that had a little bit of scandal in the past. We completely revamped it,” Frerichs said. “Put out an RFP and a new investment manager. As a result, we took our program from one of the worst to the first in the country. Morning Star Rating Agency ranked our College Savings program Bright Start a gold rating, the highest rating they give to only three programs in the country.”
Frerichs said they have taken over assets under management, from less than $7 billion to more than $17 billion.
“That’s a lot less student debt that students will be graduating with,” Frerichs said.
Question: Are there are concerns you have about our fiscal health in the State of Illinois that you plan to address in your next term?
“Most certainly. There is great progress we’ve made, we’ve seen rating upgrades at the State level. A program I manage, Illinois Funds, received a AAA rating according to the Fitch Rating Agency,” Frerichs said. “But there is more work to be done. We have a retirement crisis in this country. We set up a program to help more people save for their retirement. We have nearly 100,000 people who have retirement savings accounts today, that didn’t when I took office. We’re going to continue to grow that number, and we hope to have about a million people in this State saving their own money for their retirement, so they can enjoy their golden years.”
Question: Why did we get this rating?
“In our office, we help local units of government invest money. By pooling these investments, over $6 billion, we’re able to have access to investments they might not have themselves and get a higher interest rate,” Frerichs said. “We know that every dollar they raise through interest is a dollar they don’t have to raise in property taxes.”
Truth in Accounting said Illinois’ finances were the second worst in the nation. It said that the taxpayer burden is $52,000. Here’s what Treasurer Frerichs said could change that.
“We can do things like earning more interest for the State of Illinois. We’ve earned over $1 billion in interest since coming into office. If we help have a better educated workforce, we’re going to attract more employers. We’re trying to make sure students graduate with less debt,” Frerichs said. “To make sure we don’t have a bunch of senior citizens relying on social safety net programs. We’re having people save more for their retirement. If we do those little things, we’re not going to solve all the problems in the Treasurer’s Office, but we’re committed to being a part of the solution.”
One way the Treasurer said his office is working to ease the burden for students is through the 529 Bright Start program.
“It’s a very flexible program. It can be used in any institution accredited or higher education. It can be used for university, community college, trade program, vocational school, or apprenticeship program,” Frerichs said. “We know when we help more young people save for their future, it puts them on a pathway to success. It sends them a message that makes them work harder in high-school. We’ve increased the numbers of accounts opened in our office, we’ve more than doubled assets under management, and that’s going to mean more people graduating with less student debt. That’s something that will help our economy. Too many graduate, and they can’t afford to buy a house, buy a car, or start a family. That’s a break on our economy.”
The retirement program Treasurer Frerichs was referencing is called Secure Choice. You can find out more about the program here.
“There is a retirement crisis in this country, not just Illinois,” Frerichs continued. “Too few people have started saving money for their retirement. About a half of Americans have less than $5,000 saved for their retirement. We think the answer is to give them a nudge. To help them save their money in their own individual Roth IRA that they can control. This isn’t a state program, this is the state helping people do what they already know they need to do. We have nearly $100 million saved in Secure Choice savings accounts that wouldn’t have been saved before. We think this is going to provide a whole generation with a more secure retirement and benefit everyone in the State as those people are less reliant on social safety net programs.”
Question: We can’t talk about Illinois finances and not talk about taxes, property taxes specifically. Illinois ranks #2 for the highest property taxes in the nation. What can lawmakers do to change that trend?
“A lot of those property taxes are levied at the local level. What we try to do, is make sure that our Illinois Funds, the program that helps local governments earn money from interest, is one of the best in the country. That’s why we’re proud to get a AAA rating,” Frerichs said. “This helps them earn more in interest incomes, so there’s less pressure to raise property taxes. We don’t set those rates, but we try to be part of the solution every day.”
Treasurer Frerichs now has an opponent, Republican State Representative Tom Demmer (IL-90). Frerichs said even with an opponent, it does not change his campaign.
“We came in office to have a great college savings program and help people save for retirement,” Frerichs said. “We set up a program to help people with children with disabilities to give them a brighter future. I’ve fought on behalf of consumers in this state to get money that belongs to them. We’ve returned over $1.3 million, and we’re not done yet. We’ve engaged in fights with the life insurance industry to make sure that grieving family members get the money that was promised to them.”
One thing the Treasurer’s Office does is return unclaimed property to Illinoisans. Frerichs said his office has returned more than $1.3 billion.
“Some of the more memorable ones have been when we returned $20,000 to the Carver Center,” Frerichs said. “Money that was left by Richard Pryor, but never made it to that center. We also bring in things from safety deposit boxes like Purple Hearts. We were able to have a ceremony reuniting a Purple Heart with a woman whose father had earned it in World War Two. Constance Barr was not aware her father had a Purple Heart, and we returned it in Downtown Peoria in front of the Veteran’s Memorial.”
Frerichs said they still have 11 Purple Hearts they are looking to return. They’ve returned seven so far.
Sheehan has reached out to State Rep. Tom Demmer for an interview regarding his campaign.