State Finances Take Center Stage In Illinois Treasurer's Race

ACROSS ILLINOIS — It's a state office many Illinois residents do not know much about. In Illinois, the treasurer is the state’s chief investment and banking officer, and the treasurer is responsible for investing money on behalf of the state and local units of government.

The treasurer is responsible for wisely investing funds as a way to prevent tax hikes and funding cuts from essential services in municipalities across Illinois. The treasurer also serves as the trustee for two Illinois college savings plans and handles the state's unclaimed property program.

This election, democratic incumbent Michael Frerichs will be seeking a third term as the state's treasurer. He faces a challenge from Thomas Demmer, a Republican who is the state representative for the 90th District. Libertarian Preston Nelson is also vying for the seat.

Frerichs, 49, of Champaign, is touting his experience and success while in office among the key reasons he should be re-elected. Demmer, 37, a current State House deputy minority leader, says his experience as the Republican point person for the state's fiscal issues will help him succeed and is pressing voters to pick him over Frerichs so he can become a much-needed Republican check for today's Democratic-dominated state government.

In the weeks leading up to this year's general election on Nov. 8, Demmer and Frerichs have butted heads over what role the state treasurer should play moving forward.

“Some people ask, when am I going to pass the budget? I’d love to pass a budget, but that’s the General Assembly’s job. Others ask me, when am I going to get paid? But that’s the comptroller’s job. My job is to take money from state funds, invest that money and then make more money,” Frerichs told the Chicago Sun-Times.

“This office doesn’t make headlines,” Frerichs went on to say. “'State treasurer does his job’ or ‘state treasurer does his job well’ — that’s not news.”

Demmer says he hopes to bring a new perspective to the state treasurer's office. Demmer dissed Frerich's support of tax hikes, calling him a "rubber stamp"for Democratic Gov. J.B. Pritzker's administration, according to the Daily Herald.

"The treasurer should be speaking up and advocating for taxpayers in the big public discussions of the day," Demmer said. "The state treasurer should be someone who is going to be an outspoken advocate for taxpayers and challenge the status quo."

During his campaign, Demmer has repeatedly attacked remarks Frerichs made in 2020 regarding how voters approval of a graduated income tax, which appeared on the November ballot that year, could lead to talks on how the richest retirees should have some of their retirement income taxed, according to the Chicago Tribune. Frerichs has since repeatedly insisted he does not think retirement income should be taxed.

During his run for re-election, Frerichs has pointed to his accomplishments while in office and explained the role his office has on the average Illinois resident.

"Every dollar earned by the State Treasurer is a dollar that does not have to be raised in taxes or cut from funding for essential services in your community," he wrote in a Patch candidate survey.

He says during his term, he has earned more than $1 billion for Illinois taxpayers. He also reformed the state's I-Cash program by changing laws and systems, improving marketing of the program and making it easier for residents to claim money. Since 2015, his office returned $1.5 billion in unclaimed property from more than 1 million different claims.

Recently, Frercihs' office made history, returning the largest unclaimed property dollar amount in the nation’s history: $11 million. That amount belonged to the estate of a Chicago man, Joseph Richard Stancak, who died of natural causes in 2016.

"I have made returning unclaimed property to Illinoisans a priority. Over sometimes fierce opposition from special interests, I fought to modernize our unclaimed property laws and system," Frerichs said in Patch candidate survey. "This included taking on life insurance companies that did not pay benefits even when they knew, or should have known, that their customer had passed away."

According to Frerichs, other highlights of his term include overhauling the state's Bright Start college savings program, which went from one of the lowest rated in the nation to a top Gold rated program for five consecutive years, and launching a state-facilitated retirement savings program for private-sector workers who do not have access to an employer-sponsored retirement plan.

Demmer has received an endorsement from the Illinois Chamber of Commerce, stating they believe Demmer will fight for pro-business and pro-job policies. The Chicago Sun-Times, Daily Herald and Chicago Tribune have all endorsed Frerichs, touting his experience and accomplishments in office as reasons voters should pick him for a third term.

Frerichs won by almost 19 percentage points in the 2018 election over Republican Jim Dodge. In 2014, he was narrowly elected to office with just 9,225 more votes than Tom Cross, a Republican.

Early voting is underway in Illinois, and Election Day is Tuesday.

Why Does Illinois Have A Comptroller And A Treasurer

Illinois is among a minority of states that has a comptroller's office, and among even fewer states that have both a comptroller and treasurer. Both offices handle the state's finances and both the comptroller and treasurer seats, which are both posts not many voters know much about, are up for election.

But, when did Illinois decide to create these roles?

That all came to be in 1970 following a scandal by former Auditor of Public Accounts Orville Hodge, who embezzled more than $6 million from the state between 1952 and 1956—a cash total that would amount to about $56 million today, according to Illinois Public Radio. Hodge was in charge of the state's checkbook, and responsible for preventing the thefts of those funds.

He was convicted in 1956 of embezzlement after he wrote state checks to himself, which he used to buy more than two dozen luxury cars, two private jets and extravagant homes in Florida and Illinois, according to media reports. He used taxpayer funds to host over-the-top parties for top leaders in Springfield, according to Illinois Public Radio.

He ended up serving 6.5 years in prison, the Chicago Tribune reports.

“It was one of the early big public scandals because we had this run of public scandals, really from 1970 on, with all these governors going to jail," Chris Mooney, a political science professor at the University of Illinois Chicago, told Illinois Public Radio in 2018. During a 1970 Constitutional Convention, state leaders decided to nix the auditor position and create the treasurer and comptroller roles — with both posts needed to OK state expenses, which was meant to provide better checks and balances and financial security.

Fast-forward more than 50 years, and the races of comptroller and treasurer don't typically make headlines. In fact, some question why the two offices exist — now that we are decades removed from the Hodge scandal — and there's been calls in recent years to consolidate the offices into one.

The Chicago Tribune has been among the loudest advocates for the consolidation, saying the move would save money and make handling taxpayer dollars more efficient.

In order to consolidate the offices, the state would need to amend its constitution.