Dale Folwell is running for the office of State Treasurer.
Democratic state treasurer candidate Dan Blue III touts experience, consultative approach to leadership
Election 2016: Dale Folwell on mission to heal state pension fund, health plan
BY DEBBIE PAGE
Striding across the Starbucks, Republican State Treasurer candidate Dale Folwell apologizes for being a few minutes late. Though it’s barely 11 a.m., he has already appeared at two events in Mecklenburg County before stopping in Statesville to discuss his mission to “apply for the position of state treasurer and chief financial officer" and fix North Carolina’s ailing employee pension fund and state employee health care plan.
The state treasurer is responsible for overseeing the state’s $90 billion pension plan and the state health plan for more than 700,000 teachers, state employees, retirees, and their families.
“The biggest business in the state is the state itself, so when you do something to benefit business, like reforming workman’s comp or unemployment insurance, it benefits the taxpayers too,” Folwell explained.
If elected in November, he promises to “make employees’ money work as hard as it can.” In his first three weeks on the job, he would “find out where the pension money is, who is managing it, how good they are it, and how much money are they making doing it.”
SAVING THE STATE EMPLOYEES HEALTHCARE PLAN
During his legislative career, Folwell, who is a CPA, helped pass bills that have saved the state's cities, counties, and volunteer fire departments millions of dollars. “Now I want to take that expertise and apply it to the huge problem that’s facing our state -- the unfunded teacher/state employee health plan, which has a $30 billion hole."
“Teachers have received promises that they would have lifetime healthcare, but nothing has been put aside for that like they did for pensions. They kicked that can down the road, and now that can is the size of USS North Carolina, and it’s got to be addressed,” added Folwell.
“The other tragic thing about the health plan is that we have beginning highway patrolmen, teachers, and DOT workers who have to work one day per week to make their family health insurance premiums this year -- in some cases a day and a half per week."
He is distressed that people who are so vital to the success of society -- teachers, police officers, and firefighters -- are struggling to provide heath care for their own families. Currently, 21% of the state budget goes to keep to the state employees’ health and pension plans going, he said.
“One of the first things I’m going to do is to freeze family premiums for all four years if I am treasurer. Starting their career in the state, many young employees’ families are going without health care," he said. "We are driving young, healthy families off the state health plan because they cannot afford it."
WEAK PENSION FUND PERFORMANCE AND WASTE
State Treasurer Janet Cowell’s office reports that about only .5% of the state pension fund goes to management fees, but that figure represents a nearly 1,000% jump in fees in the last ten years, said Folwell, citing a recent WRAL report.
In 2000, the fund spent $41 million in outside fund management fees, which jumped to $513 million this past fiscal year. The pension fund had $59 billion in 2000 and currently has $87 billion on hand, so the fund’s 47% growth is much slower than the increase in fees.
“The first thing I’m going to do is cut $100 million out of the financial management fees that state employees now pay,” Folwell promised.
The State Employees Association of North Carolina (SEANC) has sounded the alarm for some time that the State Treasurer's Office is wasting state employees’ pension funds paying exorbitant fees and receiving poor rates of return in its “experimental” investments in higher risk ventures.
The unrealistic assumed rate of return for the pension fund, 7.25%, is the basis on which expected investment return is calculated. This state pension plan, one of the largest pools of money in the world, according to Folwell, has not met this projection in 15 years.
Folwell thinks a more realistic projection is 5.25%.
However, lowering this projection will cause another budget headache for state legislators, who will have to come up with millions of dollars to keep the promises made to state employees in their pension plan. However, with more transparency and accountability and cutting waste, Folwell believes the legislature will be willing to step up.
“If I am treasurer, I will open the books. There are two places where the sun is going to shine -- geographically and in the state treasurer’s office. And if I find anyone in the treasurer’s office who has put their personal gain over their loyalty to the state employees of North Carolina, we will pursue those issues. Everyone will have the same loyalty -- to the participants in the plan.”
“This job is about integrity, ability, and passion. You can be a rock star in ability and passion, but without integrity, it’s nothing.”
PLEDGE OF INTEGRITY AND LOYALTY
Current Treasurer Colwell has come under intense criticism for accepting
$300,000 in compensation from two corporate board positions, calling
into question whether her loyalty lies with shareholders or the state
employees that she was elected to represent.
“I will never accept outside compensation in any form while I’m the treasurer of North Carolina,” Folwell promised.
Though no ethics law currently prevents such activity, Folwell asserted, “I don’t need a law to tell me what’s right and wrong. When you are the sole fiduciary of the state employees’ money, your loyalty should should only be to the participants in the plan.”
DIVISION OF EMPLOYMENT SECURITY TURNAROUND
Folwell has a reputation for using his CPA background to fix financial and operational messes. When Gov. Pat McCrory came into office in 2013, North Carolina’s Division of Employment Security (DES), which oversees unemployment claims, was in turmoil. Calls went unanswered, claims were slow, and fraud was pervasive.
McCrory tapped Folwell to clean up the mess, using legislation that reduced the time period for unemployment benefits to that of other nearby states and instituting new operational procedures to cut fraud, waste, and abuse. The $2.7 billion borrowed from the federal government to cover unemployment claims was paid off, and the agency has created a $1 billion surplus since 2013 under Folwell’s nearly three-year leadership.
The agency also started requiring the claimant’s unemployment be verified and the presentation of identification to reduce possibility of fraud. The agency also discovered thousands of fake employers as well as prisoners and dead people receiving benefits.
Under Folwell’s leadership, DES also helped people on unemployment find a job more rapidly by requiring them to register on the NCWorks Online website to connect them with businesses that were hiring. Those receiving benefits also had to apply for five jobs per week to continue receiving unemployment.
The real untold story, according to Folwell, is the great job his 700 public employees did in implementing reforms that fixed the massive debt in the state’s unemployment insurance program. “I saw firsthand what happens when you let people know it’s okay to be creative. All the unemployment insurance issues are solved and will never happen again, thanks to their efforts.”
Folwell told the story of receiving a check from the state employees’ health plan for $525.10 after his son was transported to Wake Forest Baptist Medical Center after an accident. He knew the money was not owed to him and learned from the state health plan that it was to cover the cost of EMS transport, but the plan would not send it to the agency directly.
Putting on his CPA hat, Folwell investigated and learned that people all over the state collected this check and never sent it to their county EMS. Folwell discovered that one person had called an ambulance 22 times, collecting that check each time and never forwarding that money to the ambulance service, which is subsidized in each county through property taxes.
“If we don’t fix these holes in the state health plan, we are taking money away from other things people care about -- education, roads, parks. Right now, 21% of the state budget over the next 15 years will go to the state health plan and pension fund gaps, not debt service or community colleges.”
Speaking of the pension fund, Folwell added, “If I found that much waste and fraud at DES, how much is in a $90 billion plan? Even at 2 or 3%, that is real money that can be saved for state employees.”
Folwell is proud of the differences he has made in the lives of North Carolinians in his legislative career as well, much of it while in the minority party. He introduced a bill that cut the kindergarten cut-off to Aug. 31 instead of Oct. 16 to help bridge the achievement gap.
“For 37 years we put kids, especially boys, at a competitive disadvantage to all the other kids in the U.S. by making them go to school too early. It has nothing to do with the calendar -- it has to do with brain development,” noted Folwell.
He improved government efficiency with the car tax and tag program, which saved taxpayers $200 million statewide in 2015 alone by linking paying county taxes to drivers getting their yearly license plate renewals from the state.
To promote public safety, he shepherded through a bill that required license tags be removed from uninsured cars when stopped by officers and also permitted officers to take pictures of drivers without their licenses. Officers attach the picture to the ticket so that if the driver gives a false name and address, they can see that the person summoned to court is not the driver they cited.
Folwell also helped pass unborn victims legislation that allowed prosecutors to charge a suspect with two murders if a pregnant woman is the victim. California has had that law since Sharon Tate was murdered by Manson family members, Folwell added.
Folwell also cited his legislative work with blood and organ donation. He also designed the vertical driver’s license with color codes to regulate tobacco sales for those under 18 and to prevent underage alcohol abuse.
Folwell has received the endorsement of many organizations, including the State Employees Association of North Carolina, Police Benevolent Organization, Fraternal Order of Police, N.C. State Troopers, and Professional Firefighters and Paramedics Association, along with dozens of sheriffs, including Iredell County Sheriff Darren Campbell.
Local support is strong as well. Iredell County Commissioner Steve Johnson said, “I’m a big supporter of Dale Folwell. I think he has as good an understanding of the state budget than about any elected official I’ve ever encountered. He’s a man of high integrity and great intellect, and he will do a great job if the people of this state elect him. I support him without reservation.”
“I don’t think there’s any question that Dale is the most qualified candidate to be state treasurer,” said Statesville City Council member William Morgan. “Anybody who can take a $2 billion deficit that is owed to the federal government in unemployment compensation and 30 months later turn it into a $1 billion surplus has a tremendous amount of respect from me and from all of North Carolina’s taxpayers.”
The Professional Fire Fighters And Paramedics Of North Carolina political director Josh Smith commented: “Firefighters have an interesting stake in the race. Obviously, our pension is governed by the treasurer’s office. Since 2005, we have been working on parity with the police. Law enforcement has a separation allowance, a bridge gap from retirement to social security age, that we do not have, and Dale has had better answers on how to accomplish that.”
Smith also noted that firefighters work 24-hour shifts, so over the years, they will work the equivalent of seven years longer in hours than a 40-hour per week employee does. “Dale has some better ideas to change our calculation to achieve better parity in the retirement system,” he said.
Folwell is proud of this support. “No candidate has gathered this array of endorsements in a general election. What that tells you is this is not about east or west or Republican or Democrat or black or white. It’s bigger than that,” he said.
“The people who educate our children, who protect us, who provide our health care -- they will be trusting me to make the right decisions for them.”
Folwell has held an array of jobs during his life. “I was a gas station attendant, custodian, trash collector and a motorcycle mechanic before and during school.”
He understands the struggle to make ends meet.
“The people who are relying on me to guard their pension are using their hands, their feet, their back, their heart, and their minds each day. When I make decisions, when I am trying to cut out waste, fraud and abuse, I try to think about who does this money really belong to, and it belongs to them. And I know how hard it is to earn that money -- that’s who I am.”
“Too often, we have people in government who never put a bow on anything. Nobody actually fixes the problem. Every time I work on something, I try to figure out how to solve a problem permanently,” said Folwell.
TREASURER CANDIDATE DEBATE
On Sept. 27, Statesville will be the site of the N.C. Treasurer Debate. The event is scheduled from 6:30 to 8:30 p.m. at the Statesville Civic Center. Doors will open at 6:30, with the debate starting at 7 and lasting one hour. The debate will be broadcast the next evening on UNC-TV.
The Greater Statesville Chamber of Commerce, in conjunction with the N.C. Institute for Political Leadership, is hosting the only public debate for Folwell and Democratic opponent Dan Blue III. Both will answer questions from a panel of experts and media.
Attendees must have a ticket, which will be available to the public starting Thursday, September 15. Tickets are free and can be obtained by calling the Chamber at 704-873-2892.