The November 8 election in Kansas is fast approaching and State Treasurer Lynn Rogers is with the Kansas reflector podcast to help us understand why voters should allow him to have a full four year term in that job. He's running against Republican Stephen Johnson, a state legislator who prevailed in an extremely close August primary election. I'm Sherman Smith, the editor in chief, the Kansas reflector. Mr. Rogers, welcome to our neighborhood. Thank you. Glad to be here. Let's start with the simplest of questions. Where are you seeking this office? Well, I see the
State Treasurer's Office as a position that can really help ordinary Kansas. It hasn't been used that way. But there's a lot of things that we do that can help Kansans in their day to day life, our economic recovery and ag loans, the 529 learning quest, the unclaimed property. You know, I just think there's a lot that can be done if we focus on people, and a lot of good that can be done with
your good. We'll talk about some of those issues here in a second. But just for anything, a lot of people don't really know what the State Treasurer's Office is, what your your role is, what is the job? Well,
in essence, I'm the State banker. And so what that means is we go in and balance the checking account every day, we serve as kind of a watchdog and make sure the checks that come in and go out through all the different state. Most of the state checking accounts, you know, are the authorized checks. We make sure that bonds are issued for cities, counties and school districts. We do a lot of regular banking work, make loans for various things. So it really is much more focused on on day to day banking services. We provide advice to the governor and the legislature when it comes to banking services, some of those kind of things and then you know, we serve I serve on the capers board. The investment part is really less than 10%. Of what
for for people who are not familiar with with who you are, give us a little idea of your your background, how you got to this point,
okay. Well, I was an ag banker for 30 years I live in Wichita traveled western Kansas and rural Kansas for almost 31 years. I served on my Wichita school board, local school board for about 16 and a half years really had no plan to come to Topeka. But as a senator that wasn't supportive of public education. And so I ran and won as a state senator served for a couple of years. And Governor Kelly asked me to be her Lieutenant Governor and I served there. Again, for two years, we, I was in charge of what we call the Office of Rural prosperity when we helped to increase the amount of home housing for rural communities, broadband, so those kinds of things. And then when the position for State Treasurer opened up, the governor asked me to serve in this role, because of my banking background.
So you've been in this role for about a couple of years now. Have you had a chance to assess the work of your predecessor, Jacob Turner's now in Congress,
what we found when we got to the office was similar to what Governor Kelly and I found with a lot of the state agencies, things have kind of been hollowed out or we can all work we had, this office is primarily been used to run for Congress the last few treasures. And I think they're Kansans deserve better. We found a, you know, our databases were out of date. regulations that were being implemented by the Trump IRS department had not been implemented, particularly with our ABLE accounts, we were very much on the verge of losing those. Those are an account where folks that live with a disability can save additional money. And then also, we were using 1980s, banking procedures, Id pin and eggs to make payments. And so we've been able to update a lot of things, staff have really been empowered to help make decisions and move the state forward. And so I feel like in one sense, we've really been able to jump ahead and catch up with some of the things it really ignored. Partly because we didn't have a banker in this position before.
across state governments before Laura Kelly arrived, we saw kind of disinvestments in a lot of these agencies. Some rare cases, there were some leadership that perhaps were not qualified. But I'm just curious why. Why you found these these issues at the treasurer's office, was it a disinvestment issue or just people not doing what they needed to do?
I don't think that most of the folks that were there were there because they wanted to be they wanted to use the office to run for something higher up. I really don't have any desire to run to Congress. I've told people that multiple times. I really like Kansas and want to stay here. And then you know, absolutely because of my background. And like sometimes kid with people that are the fun of doing this job is that I didn't count $20 billion a year, you know, in state revenues. They don't let me near the cash but but it is part of the the fun part of banking that I've always had in my whole career. Here's how you use this, the banking services, the things that you're doing, how do you help people, and a lot of people don't understand how finances work. And so you know, this job and even my previous job, I was able to melt those together and help people improve their financial condition.
See your opponents in this race, Steven Johnson's and Assyria Republican, and he's a farmer, he also has some financial credentials. What is your assessment of him?
Yeah, he was a good legislator. I think, you know, he has a record that it makes me likes to say that is moderate. But you're really bodes very far, far right? You know, he has investment experience, which is great. But disposition is much bigger than just investments. And we do some of that through capers and PMID. But those are really my role. The trustees role for capers are really like the Board of Education or city council, we set the policy, we don't do the day to day investment advice. That's really professionals job. So you know, I think he's a little mismatched, or what he probably could do. While he do a good job, like some of the previous treasures, I'm not sure he focused on the banking and stuff that we really
you've talked about part of your role being, you know, somebody who can maybe shine a light on looming crisis before they they get here. I think one of those issues would be with with droughts in Kansas, do you want to talk about that issue?
Well, we're highlighting right now that, you know, helping people identify and talk about it. It's not something that's really coming up too often. That is we look at drought maps, we talk to farmers and ranchers, I have traveled about 65,000 miles in this position since last January. And we talked to folks all the time about, you know, kitchen table things and, and you know, their income, you know, farmers, that's a big concern. And it goes beyond just the aquifer, and the loss of water
to the Ogallala Aquifer.
But we got some really, you know, you drive around, you see a lot of dust and dry spots. And you know, crops aren't quite as good as they is some places as a Navy. So I do think it's something we need to talk about. We offer economic recovery loans, we do agricultural loans, where we take either state dollars and put that to work with financial institutions. So similar to when the the high energy costs are hitting last February, we help respond to those. And then same with the LS, county fires, we offered these economic recovery loans, that those are really designed originally just for COVID relief, but what we've seen is that it's the only kind of emergency loan programs that we offer. And we we do partner with local financial institutions, but we want to make sure that those are available. People are aware of
I'm curious about the the loan program from the give us February 2021, is this deep freeze was good reached negative 20. And it was extreme temperatures for a while, you know, it seemed like much of that issue was with price gouging was seems to be obvious price gouging these these cost of natural gas skyrockets. And it felt like you know, on one hand, people needed assistance to go pay their bills. But it also meant they were kind of locking in this this loss of having to pay this extreme cost. Are people able to I think these are maybe municipalities, you're able to pay this back.
Natural gas prices went from like $2.49, a unit to 660. I would think that's seems to be his price gouging as well. But we've seen nothing from the Attorney General on that. Supposedly he hired a law firm to investigate. But they've not approached us or, as far as I know, I have not talked to anybody. The legislature and the governor responded very quickly, Baskerville for $100 million of loans. Last February. That was on Wednesday became law on Thursday, and we had applications and money out the door on Friday, we very good legal documents, because we knew it was going to happen. So we started earlier. But so if there is any relief from price gouging, that comes back and pays down those loans, or gets refunded, we learned about 80 million of that in about two weeks, which is those loans have been paid down to less than 16 million now. So the municipalities are painful, but it's a for many of them. It's a 10 year loan, and it's you know, for a
previous kind of hanging over the stage for a long time it is it's gonna hurt those cities
for doing economic development or, or an improvement of something else that they need to do so. So I do hope that we still look at that I've been encouraging legislators to continue that, you know, they passed a resolution that they wanted to look into as well. But again, I don't think anything's been done by the Attorney General.
Well, another part of the treasurer's job, which is a little more fun than that is to hand out the unclaimed property to People who are not expecting to get a check from the States? Do you just kind of give us an overview of kind of the range? How many millions of dollars are we talking about and unclaimed assets? And how do people miss this stuff?
Well, it's about 4 million, give or take a couple million, and we hold it as trustees for the state. We've returned 25 to 30 million a year, we've kind of enhanced some of our staffing, we've tried to increase that so that they're actually doing more outbound calls. But these are checking accounts, bank accounts, stocks and bonds, but even more so it could be rebate and utility deposit a final paycheck for part time employee, and it gets mailed to your home. And for some reason, it doesn't get delivered. And then it gets sent to us.
Some people like move from one place to another and mail doesn't catch up with them.
There's only a six month period of time where, where we'll be tracking, trace and, and so we get a lot of that and we do everything we can to try to promote that and help people understand it. I try to travel at least one to two days a week where I'm at in grocery stores or coffee shops or, or, you know all kinds of different events to let people know that they have. We do festivals and events. Oftentimes when people are contacted by our office, they'll they'll think it's a fraud or somebody that's trying to scam them that will send letters will will make phone calls. I had one business and had about 16,000, I had to call about eight times before they realize the gentleman says the first thing. We tell people all the time, oh, you can just go to Kansas. cash.ks.gov is the website and you can plug your name in. We encourage people to check their nonprofits, their churches, their businesses, because we get money for them as well. If they go to a spot where somebody asks them to pay to find it, they're not our spot, we never charge for that.
One of the keys here is the.gov in the DNS, exactly, they need
to go to ks.gov. And I mean, we also have saved all the boxes. Contents. One of the things we've we discovered was that we had about 100 military medals are trying to get those reunited safely think those really belong with the family
mentalists from 50 years ago, adnd
in a week after world war two Purple Hearts, all kinds of things that people have put in there. And we do have the names and addresses of those people that are on a special part of our website now where you can go in and just look at military battles. But we're hoping to get those back. We're working with BMWs and American Legion posts to kind of pass the word and let people know about those as well.
It's really interesting. And I know that you found money for legislators, lobbyist, political party officials, you've also found money for many school districts, municipalities around the state.
Yeah, we've returned about 100,000 for school districts, probably 100 that much for cities and counties as well. And, and oftentimes, people don't realize they didn't get it, it's a vendor chat or something like that. And so, so we again, you know, we'll source all different types of ways. I think we found about 40,000 for Wichita State 25,000 for K State. So and it is, it seems weird that you can't find those places. But again, if a mail gets returned to a vendor have some kind of letter gets returned. They don't do a whole lot of extra work. And so we're gonna have to work with our holders to encourage them to do a little bit more work upfront so that it doesn't come to us in the first
place. What's the largest chunk of cash that you've handed over?
Last July? We did $5 million check to a business in the Johnson County area.
They can do you miss $5 million.
Well, and the funny thing was the people that that were holding it from them the business was receiving it was in pain and premiums during that same period of time, so there was no reason why that couldn't find the Kansas residents so so again, yeah, we have a little discussion with him as a finding these people.
So one last time for the people who are wondering if they have $5 million dollars out there the website is
cache dot k s.gov. So spell out Kansas ke N essayez cash ca sh.ks.gov
the treasurer's office handles the oversight of the learning quests college savings plan. Can you talk about what this plan is who it's for kind of the size of it? Yeah,
this is a wave about eight and a half to $9 billion or about 270,000 accounts. It's an education savings account that allows parents and grandparents to save for their kids of higher education. And in 2019 it was expanded to include that music for four year degree two year degree vocational school Technical College, even repaid student that you can put up to 16,000 A year into these accounts, you actually get a $3,000 per person or $6,000, for a couple tax deduction on your Kansas taxes, and all the earnings are tax free, until you pull them out. And if you use it for tuition and fees, there's no tax on it either. So it's really a great tax instrument to help save for higher education. I really wish my kids I've been able to do it, I, you know, I have regular savings and but I pay taxes every year on those earnings. And this sort of led me grow that for a period of time to do that type of
program has been around long enough now that the people who did start when their kids were very young, you know, they're actually able to use that now graduating now,
oh, I've heard story after story of people that said, yeah, we've used that that helped quite a bit. And plus, if you name a child, and then they choose not to go to that school, you can even change the beneficiary. We've got adults opening them for themselves to go to Masters or graduate degrees, even teachers that want to use it for continuing education. There's just a lot of uses for we work with American Century out of Kansas City, there are investment advisors, you choose the type of investment vehicle that you want, oftentimes, you know, part of the process is you put the current age of the child and what what the graduation time is. So that gives them some ideas as to how long they can invest it and what you can possibly do with it.
I've written about this program in the past and the context of your your predecessors, Republican and Democrats using this program as an opportunity to plaster their face all over the airwaves with what are basically campaign ads. But under the guise of learning quest and taxpayers foot the bill for this, I think you're the only treasurer of this century who has not done this.
We did some we've done some YouTube videos, but we've not done any broadcast advertising. I was asked the question when I first came in, what would what were we going to do with it? Or was I going to do that same thing. And what I mentioned was that we wanted to do that we thought would be the most effective marketing tools possible. And so what we've done is we've done much more many more seminars, we've been reaching out to high school counselors and to parent groups directly to let them know, you know, what's going on. We've also been doing grants to city or to school districts and, and you know, things like that, where we can get in front of parents and students alike, so that we can do that.
Is all strategy just as effective as is using, you know, these these campaign ads? Are you still seeing the program grow?
I think a lot of those ads, you know, they focus more on the treasure not on the program itself. I'm learning and people understand it. I've been amazed that we've had about a 33% increase in the number of accounts requested. And I think what's interesting on that is I think it's because people understand what it can do for them, not what it can do for the treasurer
can do a lot for a treasurer if they're looking to run for Congress. Exactly. So during during the COVID 19 pandemic, your your office was tasked with some of the responsibility of making economic recovery loans, what are the boundaries of that program? How's that working out for people?
Yes, that was a program where a business or nonprofit or an individual could borrow up to $250,000. For economic recovery, there wasn't a lot of description as to what that would necessarily mean, they have to partner with a local financial institution, a credit union, a commercial bank, or foreign credit entity, the bank takes and makes their decision based on credit standards. So we're not taking any risk, credit risk at the state. And then we will loan that money to the financial institution which loans it to the customer. Usually it's about 2% lower than what the market rate would be. And so those rates have gone up a little bit, but it's still lower than what a normal loan would be. And we've actually seen it, we've expanded it's on we use it, use it for the LS fires, we use it for some drought work now and other things. So we also have a program for agricultural loans and housing loans. Our biggest problem with the Housing Loan Program is that started in 22,008. They've never loaned it done. And so we're working out and we revamp that to make that more usable. We're looking at maybe kind of a rehab program where we partner with a nonprofit and a commercial bank to return some of these rural houses particularly but are not up to code. How do we return them to good housing stock for that community?
This federal money program?
state dollars, so it's the funding of each of those are in front of that 16 million that we can loan, you know, through the treasurer's office. We are always concerned that we get the principal back that's really key so we don't take the credit risk, but we do make better earnings on it than we would if we were loaning it just into the investment market.
I'm curious how often people default on these kinds of loans, we have never had a default that I'm
aware of. And we, if it has been that default is, is the responsibility of the financial institution with making the loan. So we're in essence, the funder for it we're providing it really works out well when the financial institutions need capital. When deposits are tight, we've been in a market the last couple of years where there's been a lot of cash in the banking world. So they have not used these programs, we've only had the agricultural loan program working, the even economic recovery, we've had about a dozen of those loans made. So there's not a huge number of those yet. But we know that with interest rates rising, those dollars are going to be a little tighter in the financial markets. And so those financial institutions, I think you'll start looking for some of that.
You mentioned that the state treasurer is a member of the Kansas Public Employees Retirement System Board of Trustees, it's known as capers, it's the state's pension system. Capers has taken a big hit in the credit market hasn't. We have,
it's dropped, we've had two previous years, we've had 25% returns. And we're currently I think, three or 4%. Negative, and so that has hit the market pretty bad. It's still better than the benchmark, that's one of the things is as a Board of Trustees, we, we asked our professionals and our investment managers to give us what they think should be the return. And then our goal is that we need that. So if they tell us we want a 5% return, we want to make sure we get better than that, if it's a 5% loss, we want to do less than that. So So that's partly what our job is, there's nine trustees, four are appointed by the governor, one by the Speaker of the House, one by the President of the Senate, and then two are elected one by teachers and one by first responders. And then the state treasurer serves as a member as well.
The state sold, I think more than a billion dollars in bonds to try to kind of make money in the markets and boosts the the holdings for for capers that I assume is not working out quite so well, just yet. It's a long term investment.
It's one of the things that there's several things that went on at the same time. You know, a third of that was actually repayment of delays, eliminations of earlier papers, deposits, that should have been made during the Brownback years. And, you know, in order to balance the accounts, many of those had to be stopped or delayed. That's what the legislature chose to do. So that was one of the things, you know, the governor had suggested that we repay those, and that was part of the bill. And then the legislature added some additional funding as well. You know, we have a moral obligation to make those payments we had since the ad is and in many cases, we it's been one of the last things that the state is funded. So these are people that have provided either first responder services, you know, our police, or firemen, or our teachers, you know, public servants. And so, you know, I'm glad the legislature has put that money in, we'd be in much worse shape if we didn't, but we still need to consider additional deposits down the road.
So I want to clarify, I know that they've repaid some of these missed payments, but they also have believe they authorized some bonds independent of that just to take out money as a loan, basically, with the idea that capers would make more money than they were paying on the interest,
right? I believe in 2014. And I want to say 17, or 18, I can remember they were four or 500 million each of those times. And in both phases, we have made more money than what the bond payments are made. And then those bond payment interests are actually paid from the general fund. They're not being paid from from papers. But part of that was under the obligation of building up the investment balance that we needed to meet
the people who are working at state agencies now are they going to have a retirements?
Yes, I think they are but there's some other issues we need to talk about few during the Brownback years, they created a third capers plan called capers, three. It is not as good of a pension plan. It's
basically a 401 ks
Yeah, a mix between them. You know, under capers, two and capers, three, if you retire the differences is you know, if you're a $50,000 income and you retire at the same day as capers, three, you'd make about 35,000 intention on one and 70,000 on the other. So in the capers, three is just not as appealing. And I think that's something that we need to look at and discuss because, again, many people go into state Government teaching, they're doing it not for the money. They're they're doing it for the public service. And the pension is always something that was used to help keep them there and deal with our loss of teachers and folks that are staying around even some of our first responders. I think there's things we have to look at, what is it going to take to keep them there so that we're protected and taken care of the citizens?
I think the the other part of this is the retirees haven't actually received a cola since 98, or 80. As far as the 90s. Yeah, we recommended
it as a board this year to the legislature, because we got any year that we had the money that was funds, you know, with that this this legislative session, they chose, you know, to vote that down with the Republican majority. And it would have been one where it's just a one year, it would have been a four and a current. So it wasn't going to be something that was going to be ongoing, that they did not want to consider that
was finally here. Do you have goals for the office that we haven't talked about yet?
Well, I think there's a lot of things again, that can be done. Things that people say Florida's housing, retirement and education, we got a great education program, we need to revamp our housing program, the legislature passed the housing savings program that hasn't really taken off yet. But we also see that, you know, 55% of the Kansans don't have retirement savings. And those that do it averages about 20,000. So we're sitting on a potential crisis, not too many years away, where people aren't going to have money when they retire, or when they're of the age where they can't work any longer. And so we're encouraging the political, something that we've looked at a couple of times called work and say, it's a program from the AARP that they're promoting. 14 states have already done it. Oregon is a good example. If you your company doesn't offer a retirement program, then you can save to the state. California has done as well. Oregon, I think they have almost $100 million saved for people's future. And it's a program we had a seminar on it in Johnson County this summer. We're trying to promote it to help more people understand what it would mean, we think it'll it's really not an issue for either red or blue, you know, Republican or Democrat. But people have retirement savings. They'll have more dignity, dignity when they face the future. And we won't really need quite as much state for welfare or social services and people and some of their own resources. It's
never too soon to start saving for retirement. Exactly.
I tell that to my staff, my kids, anybody that listen,
we have to leave it there. But thank you for joining us Kansas State Treasurer Lynn Rogers. Thank you
