Stacy Garrity and Erin McClelland (official photo/campaign photo)
Pennsylvania’s treasurer is effectively responsible for managing the commonwealth’s money. They pay the bills, make payroll and ensure funds are deposited in state accounts as directed by the legislature. The treasurer also oversees the investment of state funds and has a seat on the board of both of Pennsylvania’s pension funds.
They are also responsible for running a number of social savings programs. For example, the treasurer oversees the Keystone Scholars program, which offers $100 for every child born in Pennsylvania to be invested and spent on education, the PA ABLE program, which provides tax-free savings accounts for disabled Pennsylvanians, or 529 accounts, tax-free savings accounts that can be spent on college and other qualifying education expenses.
The treasurer also runs the state’s unclaimed property system, where money lost in the ether — maybe to an overpaid utility bill or long-forgotten savings account, for example — is returned to its owner.
Republican incumbent Stacy Garrity is vying for a second term while Democratic challenger Erin McClelland is looking to unseat her.
Garrity, an Army veteran, has prided herself on ramping up the state’s unclaimed property return system, returning over $500 million to Pennsylvanians between 2022 and 2024. She also cut fees for the 529 program and got rid of minimum contributions.
McClelland’s career has taken her from working as a substance abuse counselor to serving as a program manager and program director for recovery programs in Western Pennsylvania. She also served as the process manager for the Institute for Research, Education and Training in Addiction and founded the first orthomolecular recovery program in Pennsylvania. She says her career, and training under former U.S. Treasury Secretary Paul O’Neill, has prepared her for the job.
Both candidates have some political baggage, however.
One day before the violent Jan. 6, 2021 rally at the Capitol where rioters attempted to delay certification of the 2020 election, Garrity took part in a Harrisburg protest denying the results of the 2020 election. And in 2022, on a stage with former president Donald Trump, she announced that he won the 2020 election. No evidence of widespread voter fraud has ever been produced.
Her campaign, however, has tried to walk these statements back. And her spokesperson has said she both accepts the results of the 2020 election and will accept the results in November, even if Trump loses.
Garrity has also weighed in on other controversial national issues, like supporting the U.S. Supreme Court’s decision to overturn Roe v. Wade in a Facebook post after the Dobbs decision leaked in 2022.
During the primary election, McClelland defeated the state Democratic party’s endorsed candidate for treasurer, Rep. Ryan Bizzarro (D-Erie). And since then, a rift has grown between her and the state party.
While Gov. Josh Shapiro was being considered as a running mate for Vice President Kamala Harris, in July, McClelland posted on social media that she wanted a Vice President who doesn’t “sweep sexual harassment under the rug” and appeared to endorse North Carolina Gov. Roy Cooper (who later took himself out of the running for VP)
This was an apparent reference to a $295,000 settlement paid by Shapiro’s office over a sexual harassment complaint against one of his closest aides. The settlement included non-disclosure agreements and the aide was allowed to resign.
McClelland was not alone in her criticism. A nonpartisan women’s group also urged Harris to consider the incident when making her vice presidential choice. Numerous Republican women who serve in Harrisburg also spoke out.
In an interview with the Capital-Star, McClelland hedged when asked about her criticism of Shapiro.
“When did I use Governor Shapiro’s name,” she told the Capital-Star. “I was referring to a standard of what I would like to see, and I brought up a number of things.”
But McClelland still drew criticism from state Democrats. And Shapiro notably did not make an endorsement in the Treasurer’s race, despite supporting Democrats running for the other row offices of Auditor General and Attorney General.
McClelland said that Democratic voters concerned about her lack of party support should know her values “have always aligned with the Democratic Party’s advocacy for creating safe workplaces and advocating for workers, and I stand behind that.”
Treasurer Stacy Garrity only agreed to answer questions by email, and her answers are presented as received. Erin McClelland agreed to be interviewed by the Capital-Star, so her answers have been edited for length and clarity.
Incumbent Stacy Garrity
Stacy Garrity (official portrait)
What makes you the best candidate for the job?
Garrity: My education and life experience have given me the skills needed to run large organizations with competence and discipline. I have more than 30 years of experience in the manufacturing industry, working at Global Tungsten & Powders Corp., a global supplier of refractory powders based in Towanda – and the largest tungsten smelter in the western world. I negotiated business deals for GTP in dozens of countries. I started at GTP as a cost accountant while serving in the Army Reserve, and worked my way up to become the first of two female vice presidents at the company. I served in the Army Reserve for three decades, including three overseas deployments, and retired as a colonel.
Since taking office, I’ve set records by returning the most unclaimed property ever returned in a single year ($274 million in FY 22-23) and the most returned in a two-year period (over $500 million combined in FY 22-23 and FY 23-24). I also returned more than 430 military decorations to the veterans who earned them or their families, including 11 Purple Hearts and 3 Bronze Stars.
I cut fees multiple times for PA 529 College and Career Savings account owners, saving hardworking Pennsylvania families more than $16.5 million. I also cut fees for the PA ABLE savings program for people with disabilities, and that program has tripled in size to over $135 million in assets. I was elected as the inaugural Chair of the national ABLE Savings Plan Network, a group formed by the National Association of State Treasurers, and I was a vocal advocate for the federal ABLE Age Adjustment Act, which will make ABLE programs available to an additional 6 million people with disabilities – including 1 million Veterans.
Can you describe how you would approach investing state funds? What are your priorities?
Garrity: Pennsylvania law requires the State Treasurer to use the prudent investor standard when making investment decisions, and the Treasurer is charged with protecting capital, generating strong returns for taxpayers, and ensuring sufficient liquidity to meet the state’s spending needs. My priority is to fight for taxpayers by earning the best possible returns on investments while adhering to the high ethical standards that Pennsylvania citizens expect, and deserve, from their government.
For example, I’ve been focused on Pennsylvania’s Rainy Day Fund throughout my time in office. This fund serves as a safety net for state spending, alleviating pressure to raise taxes or cut discretionary program spending during an economic downturn. When I was inaugurated in January 2021, the Rainy Day Fund only had enough money to run the state for about two days. Compared to the other 49 states, we were at the bottom of the pack. Since then, with my strong urging, the General Assembly has made a series of smart decisions to bolster the Rainy Day Fund. Today, it stands at more than $7 billion – enough to keep the state running for about 54 days, well above the national median.
To make the Rainy Day Fund even stronger, I created a dedicated investment pool. Making smarter investments specifically designed for the needs of the Rainy Day Fund has already resulted in the state earning over $50 million more than we would have by sticking with the old strategy.
How would you maintain or alter the way the state’s pension funds are invested and managed?
Garrity: The State Treasurer serves on the boards of Pennsylvania’s three largest pension funds – the Public School Employees’ Retirement System (PSERS), the State Employees’ Retirement System (SERS), and the Pennsylvania Municipal Retirement System (PMRS).
I’ve worked alongside my fellow board members, including Republicans and Democrats alike, to apply discipline and performance-based metrics to the investments of all three systems. I even encouraged former [Democratic] Governor Tom Wolf to reappoint my predecessor as Treasurer, Joe Torsella, to the board of PSERS so that we could work together to end speculative and badly managed investments while reducing administrative and consultant costs.
The Pew Charitable Trusts analyzed the results of those efforts and concluded that the changes I pushed for will save PSERS more than $100 million every year. That’s money that will benefit both retirees and taxpayers.
I will continue to push for lower-cost, higher-performing investments. I will also continue to push for increased transparency at all three pension systems. The beneficiaries and the taxpayers deserve to know how their money is being invested.
How would you consider social or political concerns when investing state money?
Garrity: Under Pennsylvania law, the State Treasurer is required to focus on protecting capital, generating strong returns for taxpayers, and ensuring sufficient liquidity to meet the state’s spending needs. Sometimes, achieving a goal that could be categorized as providing social returns meets all of those objectives.
For example, just hours after Vladimir Putin’s illegal invasion of Ukraine, I directed my investment team to divest from Russia. As a result of that decisive action, we saved Pennsylvania taxpayers millions of dollars – and Treasury was the only state agency to complete the divestment process before Russian financial markets closed. I also directed my investment team to divest from companies based in China due to geopolitical risk and concerns about that country’s abysmal record of human rights violations.
Is there anything you would change about the administration of social programs like 529s, keystone scholars or PA ABLE?
Garrity: I will continue fighting for account owners in the PA 529 College and Career Savings Program and the PA ABLE savings program for people with disabilities, and I will continue urging new parents to enroll in Keystone Scholars.
I’ve cut fees multiple times for PA 529 account owners, saving hardworking Pennsylvania families more than $16.5 million. Under my leadership, the PA 529 Investment Plan was awarded its first-ever Morningstar Gold Rating – making it one of the top two plans in the entire country. Morningstar noted our fee cuts, our “effective and unrelenting advocacy on behalf of investors,” and our “enhanced outreach and accessibility efforts.” I also made PA 529 plans accessible and affordable for families across the state by eliminating the minimum deposit to open an account and reducing the minimum contribution to one dollar. I will continue that work.
As a Veteran, I know too many people who suffered a disability while fighting for our freedom, which is why I was a strong advocate for the federal ABLE Age Adjustment Act, which will make ABLE programs available to an additional 6 million people with disabilities – including 1 million Veterans – starting on Jan. 1, 2026. I will spread the word about this important change, ensuring that as many Veterans as possible understand the benefits of saving with PA ABLE.
Keystone Scholars provides a $100 investment for every child born to a Pennsylvania family on or after January 1, 2019, including those adopted – and does it without using any taxpayer money. To date, parents have claimed those funds for nearly 75,000 babies. Research shows that those children are three times more likely to attend a two- or four-year postsecondary institution, and four times more likely to graduate.
Would you make any changes to how unclaimed property is claimed and returned?
Garrity: The most important thing to remember about unclaimed property is that it doesn’t belong to the state – it belongs to hardworking Pennsylvanians. More than 1 in 10 Pennsylvanians has unclaimed property, and the average claim is about $1,600. We’re all still being hit hard by inflation, so that can go a long way.
I’ve made a lot of improvements to Pennsylvania’s unclaimed property system already, and I have plans for even more. I upgraded Treasury’s unclaimed property system for the first time in over 15 years, streamlining the process and allowing many claims to be approved more quickly. I also implemented direct deposit, and I started an initiative to return unclaimed property to counties, municipalities and school districts which has resulted in over $17.7 million being returned to nearly 100 local government agencies so far.
This year, I worked with the General Assembly to enact a law known as Money Match. That will allow us, for the first time ever, to return unclaimed property to its rightful owners automatically. This bill was passed unanimously in both the Senate and the House, and it was signed into law by Governor Shapiro. Truly a bipartisan accomplishment that will benefit thousands of Pennsylvanians every year, starting in early 2025.
Combined with great work from our outreach team, which I expanded, those efforts helped us set new records for returning the most unclaimed property in a single year ($274 million in FY 22-23) and the most in a two-year period (over $500 million combined in FY 22-23 and FY 23-24). I will continue to find new, effective ways to return unclaimed property to the hardworking Pennsylvanians it belongs to.
Treasurer Garrity said she divested from China and Russia. She also bought $20 million in Israeli bonds while the country was at war. How do you consider geopolitics when investing state money and would you continue these investments/divestments?
Garrity: First and foremost, every investment decision made by the State Treasurer must adhere to state law, which requires using the prudent investor standard when making investment decisions. That’s always the first consideration.
The decision to divest from Russia just hours after Vladimir Putin’s illegal invasion of Ukraine saved Pennsylvania taxpayers millions of dollars and was clearly the right decision. In fact, Treasury was the only state agency to complete the divestment process before Russian financial markets closed. Likewise, divesting from companies based in China due to geopolitical risk and concerns about that country’s abysmal record of human rights violations was done to protect Pennsylvania taxpayers.
I invested an additional $20 million in Israel Bonds because they are a smart, dependable investment with a proven track record. They pay above-market returns, and they’ve never defaulted. That’s why every Treasurer since at least 1993 – including Democrats, Republicans, and an Independent – has invested in Israel Bonds. Israel is our greatest ally in the Middle East, and I will always stand with them.
Challenger Erin McClelland
What makes you the best candidate for the job?
McClelland: Because I actually want to expand the operations of the office and make it work for the people. I also want to implement a cybersecurity program like the National Association of State Treasurers recommends that we do. As somebody that comes from a [first class] township, I know how important that is.
Secondly, I don’t think we should be politicizing our investments for electoral gain. I’m seeing that happen, so it’s something that I would like to stop.
And thirdly, I’ve actually run a small business, made a payroll, and spent a year training under a former U.S. Treasury Secretary. So I have an idea of how I see this based on the importance and value of a taxpayer dollar. We need to have an honest broker in this position.
Can you describe how you would approach investing state funds? What are your priorities?
McClelland: First we have to identify the problems we’re trying to solve based on our investment portfolio and what type of market we’re entering into. When you’re looking at high inflation rates, then you want to be investing in inflation resistant funds. It’s very dynamic, but I want to make sure that we are working with the best information in front of us.
I also think it’s important to assess investments like a credit rating would, and consider the stability of the organizations or entities and not just the bottom line. For example, pharmaceutical companies showed us that you can have a good bottom line and go belly up because of poor governance standards and ethics. Stockholders in the pharmaceutical industry lost a lot of money when organizations like Purdue went under, and I think we need to learn from that.
I also want to make sure that we’ve learned from the 2008 crash and consider things like the deregulation that led to bad results in the market. You can take something like a mortgage backed security, which seemed to most people like the most secure investment possible, right? Because nobody believed real estate was going to go down significantly. So we took mortgages, we turned them into securities, we traded them on the market, and what happened? They started to collapse at an epic rate.
So what you have to understand is why there was an information void in that transaction. That’s something that I’ve worked on and spent a lot of time understanding. It’s definitely a conversation that [former U.S. Treasury Secretary Paul] O’Neill and I had.
So I look at investing at a much more detailed level, and think about long term consequences.
How would you maintain or alter the way the state’s pension funds are invested and managed?
McClelland:
First of all, I really want to dive into exactly what’s happening there. That Saudi Arabian stock exchange deal that Stacy Garrity signed with the teachers’ pension definitely caused me a little alarm when I came across it. They’re saying there’s no direct investments, but at the same time there are “commingled investments.” I’d love to know what that means. So obviously there’s been a lot of issues, particularly with the teachers’ pension and the Department of Justice. I would love to work with the Auditor General on examining that more thoroughly and making sure that we’re being accountable.
There’s been a history of bad investments. Trailer parks, strip malls, and things like that that have gone under. So I want to make sure that we develop a much better investment strategy, but I have to see exactly what they’re doing there first to decide what we want to correct.
[editor’s note: Garrity’s campaign called McClelland’s claims about Saudi investments false. McClelland is referring to a document signed by Garrity and others retaining the Mellon Bank of New York to, if approved, handle Saudi investments for the Public School Employees Retirement System funds to invest in the Saudi market. As treasurer, Garrity has a seat on the 15 person PSERS board.
PennLIVE reported that state retirement funds “have no direct investment in the Saudi stock exchange but have limited indirect exposure to Saudi Arabia through commingled investment of funds.”
“None of this involved a direct investment in the Saudi Arabian Stock Exchange,” a spokesperson for Garrity’s campaign said.]
How would you consider social or political concerns when investing state money?
McClelland: You’d like to keep politics out of it as much as humanly possible, but it’s an elected position, so I’m not going to say that it won’t be a factor. But I really want to be an honest broker, tell the truth, and put out data and information.
But take, for instance, the Israeli bond investment. That’s a very politicized issue right now, and it’s very delicate for a lot of people on both sides. I would have also put out the prospectus on the bonds so people could understand not just what I was investing in, but exactly what Israel planned on doing with that money. That way, the taxpayers would at least understand, if you’re going to make a foreign investment, exactly what that foreign entity plans to do with that money. I would be much more transparent on the politics of it, so people can understand it.
With social issues, first of all, I think that having a culturally conscious workplace improves retention and workplace morale. That is not new information. And we know that having a workplace where people feel safe, which is what that comes down to, produces more, costs less, and does better work. That is a mathematical fact. We’ve known that for 100 years.
So looking at that is definitely something that is worthwhile, because it does contribute to long term dividends and increased profits when you have a more stable workforce that actually cultivates bold and creative thought. So yeah, that’s a value that is proven to be economically viable.
Is there anything you would change about the administration of social programs like 529s, keystone scholars or PA ABLE?
McClelland: Many of those programs have been around for a while and they do very well when you look at the asset reports, though I’d like a little more detail in those asset reports.
I would like to do more public awareness campaigns around those programs. For example, with 529 accounts, the Biden administration enacted some really great reforms that expanded what people can do with them. So they’re no longer just for higher education, but also for other educational expenses like continuing education credits, CPR classes, and things like that. I think the Biden administration’s expansion of that program is extraordinary, and I think that voters and taxpayers should know about it.
Would you make any changes to how unclaimed property is claimed and returned?
McClelland: So I’m a process improvement expert who trained a lot in Toyota Production System. For anything like that, when you’re looking at the return to the customer (in this case, a citizen of Pennsylvania), the question isn’t ‘how much money have you returned?’ The question is, ‘what is the cycle time from when one dollar gets into the treasury to the time it leaves?’ That’s what you want to work on.
The goal is to get us to the point where the Treasury is just a pass through. Money comes in, we find you, we get it back out. So the theoretical limit for anybody doing process improvement is always zero, right? Zero time spent playing around, looking for this, trying to find that, and letting it sit there.
The question I have isn’t, ‘how much money have you returned?’ The question I have is, ‘what is the longest a dollar has been sitting in the treasury?’ Does it go back to the 2000’s? Does it go back to the 70’s? How far does it go?
My goal would be to regularly post — in real time — the average cycle time for return on an unclaimed property. And I imagine that when I get in there, the number might be a year, two years, five years… But we want to get that down. And every time we decrease the amount of time it takes, that means we are doing this faster, better and more efficiently for the taxpayers. That’s my goal for unclaimed properties.
Treasurer Garrity said she divested from China and Russia. She also bought $20 million in Israeli bonds while the country was at war. How do you consider geopolitics when investing state money and would you continue these investments/divestments?
With the Israeli bonds, that was a direct investment in a foreign government. It’s very unusual to actually buy into a foreign war bond. And doing it without disclosing a prospectus is even more strange. I would definitely not do that.
I would also not be putting money into the Saudi Arabian Stock Exchange, which is what a custodial agreement with the Bank of New York Mellon allows us to do.
I still believe in Made in America. If you want to invest in bonds, you can look at the bonds in our own backyard, including municipal bonds. We really need support for our municipalities in order to put money into those cybersecurity programs I mentioned earlier. And without those, we are going to lose a fortune. We lost $400,000 in Chester, $350,000 in Washington, the water authority of Aliquippa was hit by an Iranian cyberattack. This is a very urgent issue, and it is going to start costing us a lot of money if we don’t start to get in front of it.
If we have direct investments in China, I have no problem divesting from that. But I very much doubt we’re doing a lot of that.
In order to fully divest from China, you would have to needle down in every fund to find primary and secondary investments in China. That’s unbelievably difficult to do.. So the question also is, if you’re going to divest, how many degrees of separation do you need to say that ‘we’re fully divested from China?’ You have subsidiaries. You have partnerships. It starts to get very intricate.