Name as it appears on the ballot: Dale R. Folwell, CPA
Campaign website: www.dalefolwell.com
Phone number: 336-748-0046
Years lived in the state: 57
What are the three most pressing issues facing the treasurer’s office? How would you deal with those issues? What are your priorities?
My most pressing issues as the next state treasurer are the same as the following groups’ who have endorsed me:
State Employees Association of North Carolina (SEANC)
North Carolina Police Benevolent Association (NCPBA)
North Carolina Trooper’s Association (NCTA)
Professional Firefighters and Paramedics of North Carolina (PFFPNC)
North Carolina Fraternal Order of Police (NCFOP)
Dozens of North Carolina Sheriffs
The N.C. Pension Fund is responsible for the retirement assets of nearly one million of our state’s teachers, state and local employees, law enforcement, firefighters, rescue workers and National Guard members. It is underfunded and is facing a $10 billion shortfall that is growing. On average, it has not achieved its assumed rate of return of 7.25 percent for the past 15 years! In fact, during the last fiscal year the fund achieved a return rate of less than 1 percent.
Investment fees the fund paid to Wall Street managers have ballooned by more than 1,100 percent since 2000. In 2000, the N.C. Pension Fund held $59 billion in assets and paid Wall Street management fees of $50 million. In 2016, the Fund managed $90 billion in assets and paid Wall Street $519 million in management fees! I will reduce fees by at least $100 million dollars.
The North Carolina Treasurer administers the state’s $3 billion health plan for 750,000 state employees, law enforcement, educators and retirees. The health plan is $30 in debt because money was never set aside to pay the promises that were made. We have a responsibility to the people who protect us and serve the citizens of this state to fulfill the promises that were made. A new state trooper with a family must work 5 days a month just to pay the family premium for health insurance. That is not right.
I will freeze family premiums so that the plan has certainty and is attractive to healthy families.
If we continue with the policies of the past, the issues facing the state’s pension and healthcare plans will consume over $4 billion a year from the state’s budget. That’s more than 20 percent of the entire state budget. That will leave fewer funds for education, jobs, law enforcement and infrastructure development. If we don’t attack and solve these problems, they will attack us.
So how did we get here? There are combinations of factors at play in this situation. First and foremost, the N.C. Pension Fund is in a zero interest rate environment. I think that 7.25 percent is an unrealistic return for the next 15 years. This is crucial because the earnings combined with the contributions made by public workers and their underlying departments is what makes the fund mathematically work. This is further complicated by the blessing of increased life expectancies.
Adding these factors together, the N.C. Pension Fund is on an unsustainable course. If the status quo is allowed to continue, it will result in a plan that was once 110 percent funded, but could be approaching an 85 percent fund-rate in the near future. That is a shortfall of tens of billions of dollars. We cannot allow the status quo to continue.
What in your experience, political or otherwise, demonstrates your ability to be an effective state treasurer from the time you enter office? Given that experience, what would you need to learn?
I have had 3 careers: blue collar, white collar and public service.
I was born poor in resource, but rich in confidence. I learned to volunteer for the toughest jobs and when you make a mistake; disclose it. I had a very successful blue collar career as a motorcycle mechanic, garbage collector and truck loader. I used my hands, back and feet which ultimately changed my heart about the need to be educated. I attended the University of North Carolina – Greensboro where I earned a B.S. and Masters in Accounting from UNC-Greensboro and later became a Certified Public Accountant (CPA).
I had a successful investment advisor career where, as a forensic accountant with the prestigious firm Alex Brown. I analyzed publicly traded companies and provided advice to clients increasing their portfolio values by millions of dollars. I enjoyed it and I was good at it.
I served eight years on the Winston Salem/Forsyth County Board of Education and eight years in the North Carolina General Assembly where I authored 29 major pieces of legislation that saved minds, lives and billions of dollars for North Carolinians. All of this legislation was passed with bi-partisan support and signed by Governor’s Easley and Perdue.
Even at 57, I am always learning from my experiences. While I was Assistant Secretary of Commerce at Division of Employment Security (DES), I looked to the collective expertise and passion of state employees to help me solve the problems with the state’s unemployment system. With their help and others, we were able to pay off $2.7 billion in debt building a $1 billion surplus. We have the best state employees in the nation. I look forward to leading and learning from them as the next N.C. Treasurer.
How would you define yourself politically? Given that state treasurer Janet Cowell has a relatively good working relationship with both Republicans and Democrats, how would you work to continue that trend if elected treasurer?
The root word of conservative means to “conserve” and the root word of liberal means to “liberate”. Unfortunately, neither party has done a good job of conserving or liberating.
When I was in the General Assembly and as Speaker Pro Tem, my reputation was of someone who works with both Republicans and Democrats to save money, lives and minds for North Carolinians.
While in the House, I authored 29 major pieces of legislation much of it with the support of Democrats and Republicans and signed by Governors Easley and Perdue. For example:
To make sure that every child entering kindergarten is ready to learn, I authored legislation that moved the kindergarten entrance age from October 16 to August 31. Because of the early entrance-age, every kindergarten classroom had 4, 5, and 6 year old students. This was unproductive for all students and teachers. The new entrance-age gives every kid an opportunity to get the best start possible.
Authored the Tax and Tag Program – allowing you to pay vehicle registration and property tax in one envelope. This is collecting over $200 million more a year for cities, counties and volunteer fire departments including almost $6 million in postage alone.
Authored legislation changing the orientation of driver’s licenses to vertical for people less than 21 years of age. This helps sellers of age-restricted items (beer, tobacco) to more easily determine a person’s age reducing underage sales.
Authored legislation that cemented what North Carolinians already thought; that the heart on their driver’s license meant that they were organ donors. This resulted in significant increases in organ-donations. For example, in the first year of the new law, the North Carolina Eye Bank reported a 50% increase in corneal transplants in North Carolina
I look forward to continuing my trend of working with both Republicans and Democrats as the next N.C. Treasurer.
Cowell came under fire this spring for managing the state’s pension while serving on corporate boards, giving the perception of a conflict of interest. Would you state, unequivocally, that you would not accept a position on a corporate board while serving as state treasurer? Why or why not?
I am the only candidate for NC State Treasurer who has always, unequivocally stated that I will never accept paid board corporate positions. Because doing what’s right, is rarely wrong!
In addition, I will also pursue any employee has used the “public purse” for their own benefit.
Do you approve of Cowell’s tenure as state treasurer? What has she done well? What policies would you hope to continue? What would you approach differently?
My job will be to preserve the state’s AAA bond rating as Treasurer Cowell has done. This cannot be achieved unless the $40 billion in pension and healthcare liabilities are solved. We cannot continue to issue IOU’s and expect to be perceived as fiscally responsible.
My approach could not be more different. I am uniquely trained and qualified to solve the problems that face the Office of State Treasurer. We’ve kicked the can down the road for too long. Once we start solving problems, other problems will emerge to be solved. I am happy to report that we will solve those too.
HB 2 is the most contentious issue of this election, and its effect on the economy has been substantial. Do you believe that HB 2 has or will negatively impact the state’s bond rating? If so, how would be your approach in making sure the damage is minimal?
North Carolina’s economy is $500 BILLION per year and growing. A growing economy and the proper resolution of the $40 billion in liabilities for the state pension and healthcare plans are more important to the state’s economy and its triple AAA rating.
I will always consider all negative legislative and legal impacts including the Charlotte ordinance and HB 2. Either through the courts or negotiation, I am optimistic that the issue will be resolved. Until then I will follow the law.
One of the most significant roles of the state treasurer is overseeing the state employee health plan. What would be your approach to managing the state employees’ health plan?
The plan is bankrupt and lacks a level of customer service that state employees deserve . But I believe there is tremendous potential for reducing waste and fraud thereby providing additional funding to the plan.
My approach is simple: freeze family premiums by attracting young healthy people back to the plan and take advantage of the buying power of North Carolina’s largest healthcare purchaser.
Identify a principled stance you would willing to take, even if it meant losing votes the next time you were up for it.
I would advocate for the reduction of the 7.25 % assumed rate of return in the $90-billion-dollar pension plan (one of the world’s largest). On average, it has not achieved that rate in 15 years and will not over the next 15. This will take the “funded” level to the mid 80 percentile. It has never been that low in North Carolina history. Doing what’s right is rarely wrong.
What can the treasurer's office do to help increase financial literacy among its citizens?
You can’t teach financial literacy if kids can’t READ. I am self-made (with the help of God and many others) and am a living example of what saving money, making money and the joy of achievement can do in America. I will take that story to the kids of North Carolina as well as use other methods to promote financial literacy.
As a member of the Council of State, you will be asked about spending, borrowing, and investments in general. In what areas do you believe the state needs to make significant investments? In what areas do we need to pull back our investments?
The state has to make a significant investment in paying off the $40 billion in debt for the state healthcare and pension system.
A proposed constitutional amendment in the last session would have capped the state income tax rate at 5.5 percent. Do you support an idea like this? Why or why not?
For years, a law has been in place capping the state income tax at ten percent. This year, the income tax rate is going to go below 5.5 percent. I am sure it would have provisions for recessionary times. The last thing that needs to be done in a recession is raise taxes. That’s why North Carolina is building a large rainy day fund. The rating agencies have already assigned a triple AAA bond rating knowing that the rates are going below 5.5%.
Public employees in North Carolina do not have the right to effectively bargain. Do you believe that this should be changed? Why or why not?
I do not. More importantly, collective bargaining has nothing to do with the constitutional or statutory responsibilities of the Office of State Treasurer. My duties are to make money and save money for state employees, retirees and taxpayers.
The INDY’s mission is to help build a just community in the Triangle. How would your election to office help further that goal?
The next Treasurer will make a generational difference in North Carolina’s future. Obviously, many state workers live in the Triangle. If we do not solve the $40 billion in liabilities of the state pension and healthcare plans, the economic impact on education, jobs and infrastructure will be severe. If we want to achieve a just community, the next State Treasurer must maintain AAA bond rating and make health insurance more affordable for young families who are state employees.