With a month before voters go to the polls on Nov. 2, national and statewide races are heating up. One of these hotly contested elections is taking place in Ohio for the state treasurer’s seat. Democrat Kevin Boyce, 39, who became the youngest African American to hold statewide office in when Gov. Ted Strickland appointed him to the post in Jan. 2009, is fighting to retain his post as he battles a Republican challenger with a powerful war chest, State Rep. Josh Mandel. Boyce has raised more than $1.3 million, compared to Mandel’s $3.2 million.
Overseeing $5 billion, including a $150 billion public pension fund, Boyce represents one of four African American state treasurers in the nation. Running on a record in which he says his office saved Ohio taxpayers more than $20 million through greater efficiency and prudent investing, his candidacy has gained quite a bit of national attention. It holds great significance for African American investment banks, for example, because Boyce’s open-bidding approach in reviewing and awarding bond underwriting assignments has expanded access for minority firms, including a number of BE 100s companies. Moreover, he has used his position to advocate increased financing for small businesses and financial literacy. The following are excerpts of a recent interview BLACK ENTERPRISE Editor-In-Chief Derek T. Dingle conducted with Boyce about his campaign and role as state treasurer.
BLACK ENTERPRISE: What is the status of your campaign in terms of voter support and fundraising?
Boyce: It’s a tough environment for incumbent Democrats. The economy was bad last year. A number of jobs were lost and people are rightfully angry and frustrated. They’re looking at the people in office and asking, “What are you doing to fix the problem?” So part of our message has been – not just for me but for our entire ticket – that we just got the keys. In 2006, our state went from red to blue. This last decade has not been a high-performing decade in terms of the economy. So [Democrats] inherited things in a time where it was not so good and it hasn’t gotten better. It’s been tough trying to tell that message. Being a newer guy, I think people really understand. They’re saying, “Okay. What have you done in the two years since you’ve been appointed?” I think people are connected to that but you still have to raise a lot of money to be competitive in Ohio.
How have you tackled challenges in the worst economic environment since the Great Depression?
It was truly the Great Recession. I came in at the worst possible time to manage an institution like the treasury. Not losing money was a core principle we adopted right away. Our top investment strategy was safety. We were able to grow our investment portfolio last year by $200 million by being very strategic. The other thing was increasing liquidity by about $1 billion dollars which strengthened [the state’s] bond rating. We also reduced costs on many of our banking fees by 63%.
Diversity in bond underwriting became a major focus when you took office. What has been the result of this thrust?
One of the rules we incorporated is that we should have diverse team of underwriters. Our goal is to help get some firms to be top tier. We want them to be the book runner on [bond] issuances and we’ve been able to do that. In a couple of cases, we have had several well-known, leading African-American underwriting firms as the senior manager. The latest deal, a $200 million issuance, we appointed Rice Financial [No. 4 in taxable securities with $257.7 million in lead issues and No. 3 in tax-exempt securities with $1.6 billion in lead issues on the BE INVESTMENT BANKS list.]
What has your office done to spur small business development?
Grow NOW is one of the most popular programs and the whole idea there is using the leverage of our portfolio to help small businesses grow and retain jobs. The way it works is very, very simple. Let’s say you’re a small business owner [and] want to borrow $100,000 to create this widget. Then, the borrower and the bank come to the Ohio Treasury. We take a $100,000 in the form of some financial instrument like a CD and put that money in the bank to make the loan. We use the interest we’re earning on the CD to reduce your cost on the loan. So, instead of borrowing it at 6%, you’re borrowing it at 3%, or 2%. The state gets its principle back once the security matures and the business owner has a reduced-cost loan. We aggressively allocated more resources – more than $200 million – to the expand Grow NOW.
What about specific programs for minority businesses?
We’re in the process of creating another program called Opportunity Link [which] is the same thing as Grow NOW, except that it focuses on minority and women-owned businesses. We plan to invest somewhere between $100 million and $150 million.
Why did you decide to make financial literacy a part of your mandate?
Growing up in the environment I grew up in, I definitely can see the impact of the lack of good financial choices on families and communities. There’s a statistic from the Labor Department that says 40% of Americans spend $1.22 for every dollar they earn. The most vulnerable people exist around that statistic. As treasurer, I have a unique bully pulpit to be able to talk to the public and educate them about personal finance matters. We started Smart Money Choices seminars. We felt we could really help move the needle with everyday Ohioans because we created this program that focused on specific demographics. There was Women and Money. Then Farmers and Money to talk to farmers in rural communities [about] financial matters like estate planning. We also [developed] Single Moms and Money, Kids and Money and Maestro Diner focused on the Latino community. To me, that’s where we can really make the difference. If we’re talking about long-term economic strength whether it’s urban Ohio or rural Ohio, it’s rooted in everyone being educated to make smart money choices. Coming from my background, I think I offer a unique bridge to financial literacy in America. That’s what we’re trying to do.