Invested in Rhode Island and its future

James Diossa commentary in Providence Journal, Edition 5/28/2022

The State Investment Commission — chaired by the general treasurer — is tasked with overseeing the state’s investment portfolio, including over $10 billion in state pension assets. I take this responsibility seriously. And as a candidate for general treasurer, I want to share my record, my vision for the office, and my plans to confront today’s troubling times.

The Federal Reserve recently raised its benchmark interest rate by another half percentage point in an effort to stem the coming tide of inflation. Inflation is now the worst it has been in my lifetime, and is hurting Americans across our nation and our state. This move by the Fed represents the highest rate raise in the 21st century and there are portents of more to come. While no forecast is certain, all factors indicate the Fed will impose similar rate hikes in June and July. But despite these efforts, both Main Street and Wall Street bearishly predict a coming storm. If elected as your next general treasurer, I will hold myself and my office to the utmost standards of professionalism and help steer our state through these trying and uncertain times.

In my eight years as mayor of Central Falls, I navigated my city out of a bankruptcy declared before I assumed office. After years of fiscal irresponsibility, my city faced $80 million in unfunded pension debt with only $16 million in annual revenue. My predecessor — later sentenced on corruption-related charges — left the city hopelessly in arrears. Central Falls residents saw sizable tax hikes and pensioners’ benefits were cut by up to 55%. I saw firsthand the personal impact of these drastic measures. Strong and hardworking men and women saw their futures dissipate; their retirement plans destroyed. They deserved better.

That is why, as mayor, I was committed to responsible, transparent administration to ensure my city would recover and never be in such dire straits again. By heeding the advice of experts — and with sound fiscal management — I made meaningful progress toward full economic recovery. Through these efforts, I dramatically improved the city’s credit rating, helped arrange state relief for municipal pensioners, and created a rainy-day fund in the event of future economic downturn.

To secure the financial future of Central Falls’ pensioners, I also negotiated with the Treasurer’s Office to incorporate the city’s pension system into the state’s Municipal Employees Retirement System. When I was elected mayor, I inherited a pension fund depleted from overzealous promises and poor investment. By bringing the city’s pension into the state administered system, I was able to accomplish lasting change. As part of a larger portfolio, municipal pensioners now benefit from greater diversification and access to more sophisticated tools to help protect them from volatility. There are lower operating costs, and the benefit of shared contracts and investments approved by the State Investment Commission. To me, this decision was just a question of good, transparent governance.

I will bring this same responsible management style to the state when I assume office. I plan to continue the progress begun by Treasurer Seth Magaziner’s “Back to Basics” investment policy. Through this policy, the state has divested from certain hedge funds that come with high fees but do little to decrease volatility. The state has instead sought an investment strategy more likely to exceed benchmarks by lowering fees while remaining responsive to market volatility. We must continue to make responsible decisions if we are to weather the storm of today — and those storms yet to come — and I know this investment policy will set us on the right course.

I was born in Rhode Island and I am invested in its future. I understand the personal importance of the pension system and economic stability to hardworking Rhode Islanders because I have seen the consequences of irresponsible leadership. As mayor, I dealt with those consequences and successfully navigated the ship through the tempest of bankruptcy to land on safe shores. No candidate — speculated or otherwise — can say the same.

James Diossa is a Democratic candidate for general treasurer.