SAN FRANCISCO - When Washington voters choose a successor to outgoing Treasurer Michael Murphy next month, they may well decide whether the state government continues its steadfast preference for competitive bond sales and influence how receptive it might be to proposals for public-private partnerships.
The two candidates are Allan Martin, Murphy's deputy, and Jim McIntire, a state representative and economics professor.
One of Martin's main calling cards in the election is the endorsement of Murphy, who is retiring after three terms, though Martin is a Republican and Murphy a Democrat.
"It's fair to say we are like-minded," Martin said. He served as deputy treasurer and treasurer of Chelan County before joining Murphy's state treasurer's office in 1998.
"I'm running on experience, being able to maintain a well-run state treasury and partner with local governments, which is really important in the state of Washington," he said.
McIntire, a Democrat, believes the treasurer should take a more active role in debates over state policies and long-term funding priorities.
"The treasurer can play an important role in the state, particularly in this state, by focusing some attention on our long-term financing strategy," he said.
"If you look out over the next 20 to 30 years, we're going to be facing some major capital investment challenges and we don't know how we're going to pay for them," McIntire said. "It's important to have someone in the government working with the governor and Legislature articulating those issues."
The two men differ when asked about what method the state should use to sell bonds.
Murphy has favored competitive sales since his election in 1996.
"I am a proponent of competitive bid sales. I will continue that commitment," Martin said, while adding that the market dislocations of recent weeks may require some adjustments.
"We may look at how we bid these out - we may have to change our bid parameters," he said. "It would depend on circumstances then prevailing. My basic underlying philosophy is competitive bid."
McIntire said that the treasurer's office may need to be more flexible, particularly in light of the recent crisis atmosphere in the markets.
"I think were going to have to look at the question of how were going to be able to function in that market," he said, noting that competitive sales volume nationally has dwindled in recent weeks. "We're going to have to see if that market comes back, or whether some changes are going to be needed from that perspective going forward."
Competitive sales have accounted for about 15% of total national issuance thus far in 2008 compared to about 17% in all of 2007, according to Thomson Reuters. About 85% of new issuance was sold through negotiation with underwriters for the year to date compared to about 82% in 2007.
According to news releases from the treasurer's office, regular bidders for Washington state bond business over the past two years have included UBS Securities LLC, Bear, Stearns & Co., Merrill Lynch & Co., and Lehman Brothers, which have either left the muni business, or been merged with or acquired by other banking institutions.
As the bond issuer for the state, the next treasurer is likely to have a role in ongoing debates over tolling. State transportation officials are working on plans for a toll-financed solution to replace the State Route 520 bridge over Lake Washington.
A ballot measure this year from perennial initiative promoter Tim Eyman would require, among other things, that tolls collected on one project not be used for another project.
That could pose major problems to the $4 billion plan for the 520 bridge. Both McIntire and Martin say it would be difficult to add tolls on the bridge without also tolling the other bridge across Lake Washington, because traffic is likely to divert to a free bridge.
Martin says he is a skeptic of plans for public-private partnerships to build transportation infrastructure, partly based on his experience in the treasurer's office evaluating proposals for a new Tacoma Narrows Bridge, which opened in 2007.
That bridge was financed with bonds carrying Washington's general obligation pledge, though they are structured to have bridge tolls cover the debt service.
"The state's borrowing ability is much better and at a better rate than any entity on a public-private partnership," Martin said. "For us it comes down to the economics of borrowing money for those projects, who can borrow money most cheaply, and that is the state because of its strong credit."
McIntire said he would view any P3 proposals with an open mind.
"My view is that it's useful to have a treasurer who's prepared to entertain all the proposals and take a sharp pencil to determine what's best for the taxpayers," he said. "I don't take an ideological view to this; I take a pragmatic view."
McIntire, from Seattle, is finishing up a 10-year stint in the state House.
His experience there includes time as chairman of the Finance Committee and the state's Economic and Revenue Forecast Council, and service on the Finance Committee, Capital Budget Committee, and the Financial Institutions and Insurance Committee.
McIntire teaches economics and government at the University of Washington, and has a private economic consulting practice.
Martin was a deputy treasury overseeing debt management in the treasurer's office before becoming Murphy's top assistant in 2007. Before joining the state treasurer's office in 1998, he was the elected treasurer of Chelan County.
Though it's the only statewide office with an open seat this year, the race for treasurer is decidedly overshadowed by the race for the White House and the governor's office.
The McIntire campaign has reported raising a bit more than $242,000 as of Wednesday, according to the state's Public Disclosure Commission, and the Martin campaign reported raising about $105,000.
That stands in contrast to the governor's race, in which incumbent Democrat Christine Gregoire has raised almost $12 million and Republican challenger Dino Rossi $10.4 million.
Their hotly contested race is a rematch from 2004, an election decided by 133 votes.