Voter GuideTreasurer
English

The State of California is seeking an expert asset manager to oversee its massive portfolio of investments and finances for the next four years.

Qualifications:

  • An eye for good investments: Oversees the state’s Pooled Money Investment Account, investing money on behalf of the state and local jurisdictions
  • A collaborative spirit: Serves on many boards and commissions, including the state’s two largest public pension funds: the California Public Employees’ Retirement System and California State Teachers’ Retirement System  
  • A strong grasp on the financial needs of the state’s public works: Monitors schools and higher education facilities, transportation projects, parks and environmental projects
  • Good judgment on financing: Awards low-cost, tax-exempt financing for housing, economic development and student loans, plus hundreds of millions of dollars in tax credits for affordable housing

Compensation

$174,843 Individuals with a strong work ethic are encouraged to apply, but this may not be a good fit for those looking for a career launchpad: Four of the last five treasurers ran for governor, but none won. 

About the hiring process:

Applicants will need to beat out the incumbent, Fiona Ma, who was elected treasurer in 2018. The fourth Democrat in a row in the job, she has the party’s endorsement for a second term despite some recent controversies. She’s being sued by a former employee who alleges that Ma sexually harassed her in an attempt to cover “unlawful conduct” and “improper gifts” from Sacramento-area businesspersons. Ma denies the allegations. She was also called out for supporting legislation to help Santa Ana police union president Gerry Serrano boost his retirement benefits by counting his union salary towards his pension. 

Still, Ma won 57% of the vote in the June primary. In the November general election, Ma’s challenger is Republican Jack M. Guerrero, a city councilmember in Cudahy in Los Angeles County and a CPA. Guerrero got involved in local politics after a corruption scandal in his city. He has been a vocal supporter of former President Donald Trump and, in contrast to Ma, hailed the U.S. Supreme Court ruling overturning of Roe v. Wade. His platform includes lowering taxes and advocating for a smaller government. 

With about 22% of the vote, Guerrero beat out Andrew Do, a Republican and Orange County supervisor, for the second spot in the general election. 

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Applicants

  • Democratic
  • Republican
  • American Independent
  • Green
  • Libertarian
  • Peace & Freedom
  • No Party
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Here’s where Jack Guerrero and Fiona Ma, applicants for state treasurer, stand on the big questions about California’s budget, pensions and taxes. 

Key Topics
Where Candidates Stand on the Issues
Budget
Economy
Taxes
Pensions
Housing/homelessness

While the state budget is awash in surplus cash, the nonpartisan Legislative Analyst’s Office and other watchdogs have repeatedly questioned whether all that money is being spent wisely or effectively.  

Which areas of the state budget would you focus on to make sure spending is effective?
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D
Fiona Ma

Housing. My priority is making it more efficient and cost-effective to meet Gov. Newsom’s goal of building 3.5 million homes by 2025. Under my leadership, we have sold bonds that fund the CalVet Home Loan Program that helps veterans buy a home. We also embarked on our first student housing project at Santa Rosa Community College, and plan to build more student/faculty housing at other community college sites. My office also administered the study for the “California Dream for All” loan fund that will help provide gap funding for first-time homebuyers who need assistance making down payments. 

R
Jack Guerrero

Given the state’s precarious credit rating (among the worst in the country), and the recessionary flags for our economy, I would focus on reducing expenditures, paying down debt and lowering taxes. I would also start enforcing the Gann Limit, which restricts the growth of government spending and requires excess revenue be returned to the taxpayer. Unfortunately, sneaky politicians find ways to exploit loopholes in the law and circumvent these restrictions, with the consequence of growing the government well in excess of population growth. This failed strategy displaces private investment, overburdens our people with crippling taxation and slows the pace of economic growth.

Even though the economy is rebounding from COVID, California still has the nation’s highest jobless rate and hasn’t recovered all the jobs lost. Experts say the pandemic widened the gap between California’s rich and poor in some ways, despite unprecedented direct relief. 

Do you support a further increase in the state minimum wage?
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D
Fiona Ma

California’s minimum wage of $15 per hour equates to $28,800 per year. This is far below the “living wage” of $34,337 for a single person. However, California is not monolithic. Having started my public service career on the San Francisco Board of Supervisors, I support giving more decision-making authority to local governments to raise wages, since they better understand the needs of their constituents. For example, 12 localities plus the County of Los Angeles raised their minimum wages on July 1, 2022. I support the law that is expected to raise the minimum wage in California to $15.50 in 2023.

R
Jack Guerrero

We cannot afford more job-killing legislation, especially when California’s economy is facing recessionary headwinds. Speaking as an economics researcher and a one-time university lecturer in statistics, I can confirm that empirical research over the past 70 years reveals that minimum wage increases reduce employment. By arbitrarily raising wages, the net effect is a widening gap between the supply and demand for workers at the new price point. If we really want to reduce poverty and improve living standards, we should focus policy on skills development for the modern workforce, and on creating a favorable environment for businesses and employment opportunities to thrive.

Is state government doing enough to address the growing divide between the haves and the have-nots? Do you support a guaranteed, basic income?
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D
Fiona Ma

We are not doing enough to address the growing divide. I support a guaranteed yearly basic income model with appropriate guardrails. I also support additional basic income initiatives, such as Stockton’s targeted neighborhood programs begun under then-Mayor Michael Tubbs and the Legislature’s proposals to support pregnant women and those that left foster care. I also backed the expansion and promotion of the Earned Income Tax Credit, as well as the California College Promise Program, which provides free tuition to students who attend a community college.

R
Jack Guerrero

Sadly, state government policies are further widening the income gap between rich and poor. Out-of-control gas prices and taxation schemes disproportionately affect working families who direct a greater share of their disposable income to consumption. The shutdown of government schools short-changed working class communities and exacerbated the education gap. State policies routinely cripple small businesses (the backbone of our economy and the source of employment in disadvantaged communities) by raising taxes, subverting jobs and over-regulating businesses. Rampant government corruption cheats residents, encroaches on their wages, and diminishes quality of life. We need serious education reform, lower taxes for working families and an end to government corruption.

The pandemic has highlighted how much the state relies on the wealthy for tax revenues that are fueling record budget surpluses — and raised again the issue of whether the tax system needs an overhaul. Conversely, some progressives are pushing to increase taxes on the rich. 

Do you support any changes in income taxes or sales taxes to account for the shift to a service economy?
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D
Fiona Ma

The top 1% of state income taxpayers pay about 45% of the state’s total personal income taxes. And about 95% of our state’s General Fund is made up of personal income taxes, sales taxes and corporate income taxes so we need high income earners to stay in California. Our sales tax laws should be reviewed in their entirety. Changes could be made to increase uniformity regarding items that are subject to sales taxes. I do not support a shift from sales taxes to a service tax since it would put an undue burden on small businesses and sole proprietors.

R
Jack Guerrero

The tax burden in California is the worst in the nation, all aspects considered. Many of these schemes (like California’s notorious gas tax) are regressive because working-class families spend a greater share of their disposable income on consumption. The highest sales tax and property tax rates in the state are also located in the most disadvantaged communities. This is unacceptable and only furthers the burden on small businesses and working-class families. I support lower tax rates across the board, to reduce the burden on families and to mitigate California’s destructive environment for jobs and businesses.

Do you support a “wealth tax” or increases on tax rates on upper-income residents? If so, what would the revenue be used for?
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D
Fiona Ma

I do not support a wealth tax. Our state is highly dependent on high-income earners. We should be encouraging and incentivizing these individuals to stay and invest in California. Nations that have experimented with wealth taxes have largely found that they have failed and have repealed them. According to the Organization for Economic Co-operation and Development, the reasons for failure of the wealth taxes include limited revenue collection, administration and compliance costs, tax avoidance, evasion and the desire to attract more foreign investments. 

R
Jack Guerrero

The top 1% of income earners in the state of California contribute 50% of California’s personal income tax. Their top marginal tax rate is 13.3%, which for 2022 is the highest in the country. While progressive tax structures based on income level are appropriate, the excessive rates across the board are generating pernicious consequences for our economy. Business owners and high-wage earners, including innovators and job-creators, are fleeing the state at unprecedented levels. The solution is to cut tax rates across the board, and to create a favorable business climate to unleash the full wage and employment potential of the private sector.

In the short term, Gov. Gavin Newsom and legislators are urging the state’s two huge public employee pension funds to divest from Russia over its invasion of Ukraine. In the longer term, CalPERS and CalSTRS both face huge amounts of unfunded debt, forcing them to consider riskier investments in search of higher returns

How would you reduce the unfunded debts of CalPERS, CalSTRS and local governments?
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D
Fiona Ma

Gov. Jerry Brown made needed changes to our pension systems with the California Public Employees' Pension Reform Act, which included provisions in legislation I authored. With its surpluses, the state also has been making extra contributions to our pension systems to pay down unfunded liabilities to save the state money, which I have supported. Strong investment returns over the long term will be key to reducing costs for employers and members. I supported recent changes in new asset allocations that increase investments in private markets such as private equity, real estate and private debt.

R
Jack Guerrero

The state’s unfunded pension liability presents the single greatest threat to the long-term fiscal stability of the state. According to Stanford University economists, the unfunded pension liability for CalPERS, CalSTRS and the University of California combined stands at a staggering $1 trillion! As a former pension auditor and university lecturer in statistics, I can confirm with mathematical certainty that the system will fail. It is completely unsustainable. The solution begins with telling the truth and then coming together as stakeholders to reform the plan for future employees, and for all unearned deferred compensation across the board.

Do you think the state should divest from Russian companies or funds due to the Ukraine war?
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D
Fiona Ma

Absolutely. I was one of the first elected officials in our state encouraging California’s pension systems to divest from Russian companies.

R
Jack Guerrero

I believe the state should divest from companies that operate in turbulent markets (particularly those with unstable government regimes) and those companies that follow less-than-transparent financial reporting. Many Russian companies operate with limited disclosures or unreliable accounting standards, for example. In any case, the decision to divest (or invest) in any sector or geography should be based on return on investment, risk assessment and economic analysis pursuant to the fiduciary responsibility to maximize return for taxpayers and constituents.

Would you change any specific investment policies of CalPERS or CalSTRS?
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D
Fiona Ma

Climate change is real. We have a responsibility to take action today. For three years, I was the only CalSTRS board member to stand with the youth “Earth Guardians” to urge a major change in the climate investment policies of our pension systems. As a result, CalSTRS will soon conduct a new asset liability study incorporating climate change scenarios. I also support integrating Diversity, Equity and Inclusion in our investment portfolios to ensure more diverse leadership and ownership at public and private companies.

R
Jack Guerrero

Investment policies should conform with the fiduciary responsibility to maximize return and minimize risk. Regrettably, the unrealistically achievable discount rate (7.0%-7.5%) used by the pension fund boards (and by fuzzy math politicians) creates perverse incentives for the funds to invest in risky assets. A greater share of investments for CalPERS and CalSTRS is now directed to private equity funds, which do not subscribe to the same standards for financial transparency. Similarly, the funds are also investing in foreign companies, which operate in turbulent markets with unstable governments. Investment policies should focus on maximizing return, demanding financial transparency across the boards and upholding the highest accounting and disclosure standards.

California’s affordable housing crisis only deepened during the pandemic, as average home prices surged even further out of reach for many families. Homelessness likely worsened as well, prompting Gov. Newsom to propose forcing more homeless and mentally ill people into treatment. The Legislature twice extended a statewide eviction moratorium, but the final protections for renters ended on March 31. Lawmakers also tried to pump up housing supply by allowing duplexes on single-family lots, but cities are pushing back. Some also say the California Environmental Quality Act is stopping housing production.  

How would you increase the production of affordable housing?
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D
Fiona Ma

I have combined the state’s two boards that I chair overseeing housing financing under one common management and also streamlined processes. During the past four years, we have approved more applications than ever before and focused on new construction projects for low-income communities. This has helped private sector developers build more than 5,000 projects that have created more than 435,000 low-income units. Solving the housing crisis is possible. We must assist affordable housing developers to build more. And we must encourage and reward local governments that allow for increased density and multi-family development.

R
Jack Guerrero

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