Arizona GOP Treasurer Candidates Clash Over Who Can Manage State’s $32 Billion Portfolio

Elijah Norton and Katherine Haley traded sharp attacks on each other's qualifications during a televised debate Tuesday night, as the Republican primary for Arizona state treasurer heats up ahead of the August election.

Norton, a state treasurer hopeful who runs Veritas Global Protection, an extended warranty company, argued that Haley lacks the financial expertise to manage the state's $32 billion in investments.

"I think my opponent's a lovely person. But this is about experience. She's not qualified, frankly, and I mean this with all due respect, to be the bookkeeper at a pizza parlor," Norton said during the debate on KAET-TV.

Haley, owner of Oak Rose Group, an investment advisory firm, pushed back by emphasizing that the treasurer's role is constrained by state law and oversight from the State Board of Investment.

"At the end of the day, you are following state statute and also what is defined in the Constitution," Haley said.

Endorsements divide the field

The two candidates represent different wings of the Republican Party.

Norton carries endorsements from Free Enterprise Club, Turning Point USA, and Arizona Senate President Warren Petersen. Petersen, a Yuma Republican who recently announced he is running for attorney general, threw his support behind Norton's more aggressive investment approach.

Haley has the endorsement of current State Treasurer Kimberly Yee, who is running for state superintendent of public instruction after two terms. Haley also served as a policy adviser to former U.S. House Speakers John Boehner and Paul Ryan in Washington, D.C.

Norton dismissed Boehner and Ryan as "swamp rats," a term used by hardline conservatives to criticize establishment politicians.

The special education trust debate

The candidates also clashed over one of the most consequential policy questions facing the treasurer's office: how much money should be withdrawn from Arizona's special education trust account.

The trust, built from nearly 10 million acres of land the state received when Arizona became a state in 1912, holds more than $10 billion in investments. In 2016, voters approved Proposition 123, which raised the annual distribution to schools from 2.5% to 6.9%, generating an extra $300 million for education. That authorization has since expired.

Governor Katie Hobbs proposed boosting the distribution to 8.9%. Republican lawmakers have proposed keeping it at 6.9%. Current Treasurer Yee rejected both proposals as unwise.

"We do have to protect the principal," Haley said. "On average, an endowment distributes about 5%." She called that figure a safe level going forward.

Norton called Hobbs' proposal "absolutely ridiculous" but declined to say what level he would support.

Different visions for the office

The candidates also disagreed on the fundamental role of the treasurer.

Norton argued that the treasurer should be the "chief banking and investment officer of our state" and that Arizona could earn significantly more on its investments with better management.

"If you take our portfolio to somebody who actually understands investments, they're going to say we should have about $3 billion to $5 billion more than we actually do," Norton said.

Yee told Capitol Media Services that the treasurer should focus on managing the agency and hiring qualified staff rather than making individual investment decisions.

"The treasurer should be the manager of the agency and hire the best individuals qualified," Yee said. Haley aligned herself with that view.

The Republican primary for Arizona state treasurer will be held in August. The winner will face the Democratic nominee in November's general election.