Inflation, investing, saving: Arizona treasurer candidates Martín Quezada, Kimberly Yee answer questions

The Arizona Republic posed questions to the candidates running for state treasurer to give voters a better understanding of how they would run the state office.

Incumbent and Republican Kimberly Yee is facing a challenge from Democrat Martín Quezada in the November election.

The treasurer oversees banking and investment for the state, assists local governments with their investments and manages Arizona's Permanent Land Endowment. The office also runs the state's 529 college savings plan.

Yee was the first Asian American candidate to win statewide office in Arizona when she was elected in 2018. She was previously a state senator and has worked for the state Legislature and the Treasurer’s Office.

Quezada is a Phoenix lawyer who served in the Arizona Legislature for the past decade and is running for statewide office for the first time. Prior to that he worked at the Legislature but left to attend Arizona State University for law school.

They had a televised debate Oct. 3.

Below are the questions and the responses from each candidate.

Addressing inflation

Question: Arizona is a national hotspot for inflation. Can you explain how inflation is affecting the Treasurer’s Office, if at all, and how you would address this as state Treasurer?

Yee: As interest rates rise, the Treasury earns more money and we currently project $180 million in earnings for the general fund this fiscal year that can be used by the Legislature to offset the costs of state agencies because of Biden's inflationary environment.

I have been a longtime advocate of financial education. As treasurer, I have been committed to helping families with helpful financial tips as they navigate this inflationary environment and share with them the simple message of "never spend more than you make." I have published free financial education resources on the Treasurer's Office website to assist students, families, veterans and senior citizens.

Quezada: Rising costs are affecting all of us and across all sectors. As state treasurer, my focus will be to create the strongest investment portfolio possible to guard against the whims of the market. While my opponent has self-imposed, politically motivated restrictions on what she is willing to invest Arizonans’ money in, I pledge to evaluate investments according to facts and sound investment strategies. By focusing on sound investments instead of politics we can make sure our state funds are getting a high enough rate of return to offset profits eroded away by inflation.

It’s hard for Arizonans to talk about saving for a rainy day when the costs of groceries have doubled in the last six months. Arizonans are having a hard time saving right now so an effective state treasurer will have to be proactive and creative in finding ways to help people save. Now is the time for the office’s financial literacy efforts to be amplified and re-energized, but currently those efforts are hardly more than links on the treasurer’s website because our current treasurer was too busy running for governor.

School districts and local governments are also struggling with rising costs and will be relying on state investments to help them weather the current economy. We have an opportunity to help Arizonans if we have the right person in the Treasurer's Office who is actively engaging in these efforts.

For subscribers: Environment, politics and antisemitism dominate much of debate for Arizona treasurer

Sound investing practices

Q: Can you explain your principles for ensuring Arizona’s funds are placed in sound investments through the Treasurer’s Office?

Quezada: Safety. This is the most important principle I will abide by when it comes to investing Arizonans’ hard-earned tax dollars. I will welcome any and all evaluations of risk in creating our investment portfolio. We cannot afford to waste taxpayer dollars by refusing to evaluate risk.

Evaluation. I will make sure the rate of return on investments (also known as the yield) is at the highest profit margin possible. It is the responsibility of this office to give taxpayers the highest rate of return possible. I will not make financial decisions based off of personal politics.

Sound executive management. The state treasurer earns a full-time salary paid by taxpayers — our current state treasurer isn’t working full-time to earn it. I’m committed to working full-time to ensure Arizonans get more money back in their pockets.

Yee: The guiding principles for the investments of the Treasurer's Office under my leadership have been, "Safety, before Liquidity, before Yield," and I will never lose sight of the fact that the funds I invest as the treasurer of Arizona belong to the taxpayer, so we must produce the highest possible yields on our performance. I have one of the strongest records of performance during my leadership as state treasurer, having earned $2 billion in the course of my time in office.

Environmental, Social and Governance (ESG) scores

Q: What are your thoughts on ESG scores and whether they should be used as a guide to how Arizona invests?

Yee: ESG scores are based on a political scorecard, not a financial scorecard. This is a dangerous path when a radical political agenda gets in the way of prudent fiscal policies that are intended to protect taxpayers. In August, I led the country in adopting an investment policy statement that prohibits the Treasurer's Office investments from being subject to the subjective political whims of ESG standards.

My office will continue to prioritize safe investing over politically motivated agendas which my opponent supports. I believe in America's free enterprise system and free-market principles, while ESG factors force the big hand of government to pick winners and losers in the private sector, which is wrong.

Quezada: ESG stands for environmental, social, and governance standards. ESG scores are simply evaluations of potential risks. Major corporations such as ExxonMobil, Nike, Pepsi, and McDonalds all use these standards to inform their business practices. They should absolutely be one of the tools we use to look at the financial health of companies as well as the short and long-term safety of investing in those companies.

Why my opponent wants to reject financial information used by major corporations is beyond me. When charged with protecting Arizonans’ money, the first thing and most important consideration should always be how safe an investment may be. ESG scores give an insight into the future risk (or lack thereof) of a potential investment. To refuse to even consider this information is a huge mismanagement of the people’s money.

More: Arizona state treasurer candidate Kimberly Yee says she has more work to do

Saving for higher education

Q: How can Arizona’s College 529 savings plan be improved by the Treasurer’s Office?

Quezada: This is a great program, but we can do more with it — big dreams cost money and we should be creating a pathway for Arizonans to achieve their dreams. It is not enough to casually tour around and notify Arizonans this plan exists — your state treasurer should be actively promoting this program, explaining what this program is, the benefits and penalties, which funds you can transfer in and out of, and many other details that go into making informed financial decisions.

The 529 savings plan is an excellent option for people who already have money to invest. The plan does nothing to help our most needy increase their chances of success in higher education. I introduced a bill as state senator this year, Senate Bill 1589, which would have invested directly into our children's futures by providing seed money for their 529 accounts. I also believe we could mirror this program to create a pathway for people to save for purchasing a first home or starting a small business.

Yee: At my request, the Arizona 529 College Savings Plan was transferred to Treasurer's Office in October 2020 and the first change I made was to the name of the program to call it the Arizona 529 Education Savings Program so that families would know that it is not just about college savings, but also saving for the skilled workforce and vocational development.

As a longtime advocate of financial education, I want to prepare families to start saving early for their child's higher education, whether it be traditional college or vocational education. I have intentionally expanded outreach of the AZ529 Plan to ZIP codes where families have never had an opportunity to go to college and the highest level of engagement has been in these very communities across the state.

In the 23 months that the AZ529 Plan has been under my leadership, new accounts have increased by 21,737 and assets are up 10.3% to $1.78 billion due to the hard work of my staff. This means more families are starting to save for their children or grandchildren's education and that means more security and opportunity for their futures.

We are always looking to improve our outreach to additional corners of the state, to reach rural areas, diverse communities and schools.

Election guide: November 2022

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| Ballot measures | Federal races | How to vote

Why voters should choose you

Q: Can you tell us in one sentence why you would better serve Arizonans in the Treasurer’s Office than your opponent?

Yee: I have achieved historic record-setting financial performance as treasurer, distributing $2 billion in earnings under my leadership, and Arizona needs an experienced, proven leader with a steady hand at the wheel, especially in this financial economy.

Quezada: My opponent has used the state Treasurer’s Office as a political platform to leverage a run for higher office, to tweet out her extreme anti-choice views, and to pick and choose her political favorites to invest in — as your treasurer I will work on behalf of Arizonans and use all available information to help put money back in the pockets of taxpayers.

Reach reporter Ryan Randazzo at ryan.randazzo@arizonarepublic.com or 602-444-4331. Follow him on Twitter @UtilityReporter.

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This article originally appeared on Arizona Republic: Arizona treasurer: Republican Yee, Democrat Quezada answer questions