State House Sound Bites

Capitol reporter Katie Meyer covers Pennsylvania politics and issues at the Pennsylvania state capitol.

Incoming treasurer setting sights on savings

Written by Katie Meyer, Capitol Bureau Chief | Jan 17, 2017 4:27 AM
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Torsella will take over for Timothy Reese, who was appointed by the governor after former Treasurer Rob McCord resigned in disgrace. McCord has since pled guilty to extortion. (Photo by AP)

(Harrisburg) - Pennsylvania's finances are getting a new manager at a time when lawmakers on both sides of the aisle are desperate to conserve money to balance out the commonwealth's debts.

Incoming Treasurer Joe Torsella said he plans to take a hard look at how the state's assets are invested in hopes of finding some savings.

Some preliminary work along those lines has already begun.

Just last week Governor Tom Wolf announced the state is bundling control of three relatively minor state funds under the treasury, and doing away with outside investors who previously managed the funds.

That's something Torsella, a Democrat, campaigned on; he said getting rid of outside investors may be one of the most surefire ways to cut costs.

"In the end, trying to beat the market is ultimately a fool's errand," he said. "What you should responsibly hope for is that you achieve market performance, but that you don't pay a very high fee to do that."

There's a total of $10 billion specifically under the treasurer's management.

Torsella said he also wants to turn his attention to changing investment strategies in the state's largest pools of money--particularly the nearly $80 billion pension fund, which is managed by many expensive outside investors.

The treasurer's just one of several trustees on that fund. Others include lawmakers and the governor, who would have to sign off on changes.

But Torsella said he thinks the state's budget woes may just help build consensus.

"We know it's not going to be an easy budget year," he said. "So it's a matter of looking at how we've done things in the past--which may not be the right way to do them in the future--and making sure we save every dollar we can."

The state is facing significant budget shortfall this fiscal year, on top of a multi-billion dollar structural deficit.

Published in News, State House Sound Bites

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