Rep. Steven Johnson, left, a Republican from Assaria seeking the GOP nomination for state treasurer in August, discusses legislation while standing at the third-floor railing in the rotunda of the Kansas Capitol. (Tim Carpenter/Kansas Reflector)
TOPEKA — Political campaigns are anchored to fundraising, polling and vote numbers, but Republican Steven Johnson wants folks to focus on electing a state treasurer in November with the skills to deliver precise and transparent financial guidance for Kansas government.
Johnson, a member of the Kansas House since 2011, was introduced to politics as student body president at Kansas State University and national president of the Rural Electric Youth Program. He’s a fifth-generation farmer with 1,000 acres of soybeans, corn, wheat and sorghum south of Salina near Assaria.
He worked 20 years for the financial services firm Ameriprise Financial, where he was responsible for calibrating investment models and assessing whether portfolio projections met reality.
“Occasionally numbers are presented as people wish they were rather than as they are. And you can only make good decisions based on numbers as they are,” Johnson said on the Kansas Reflector podcast.
In Kansas, state treasurers are elected to four-year terms. They serve as chief custodian of Kansas’ cash deposits, bond sales and the investment of those assets. A state treasurer has jurisdiction over the state’s unclaimed property fund and the college savings program’s $2.7 billion in deposits. State treasurers hold positions on the board of the Kansas Public Employees Retirement System, or KPERS, and the Pooled Money Investment Board.
Two-person GOP field
In what was expected to be a four-person Republican Party’s primary in August, Johnson appears headed for a one-on-one showdown with state Sen. Caryn Tyson, of Parker. The field thinned when Michael Austin of Lawrence suspended his campaign in January and Sara Weir of Overland Park withdrew in February.
Democratic state Treasurer Lynn Rogers was sworn into office in January 2021. He was appointed by Democratic Gov. Laura Kelly and is running for a full term. Rogers replaced Treasurer Jake LaTurner, the Republican who won the 2nd District seat in Congress in 2020. GOP Gov. Sam Brownback had appointed LaTurner to the treasurer position in 2017.
In January, Johnson reported donations of $403,000, including $200,000 in personal loans, on his 2021 campaign finance report. He held $383,000 cash-on-hand at that time. Tyson reported $164,000 in donations and $155,000 in the bank. On the Democratic side, Rogers reported $237,000 in donations and $211,000 in cash at close of last year.
Johnson, 56, has served on House taxation, insurance and pension, appropriations and two other budget committees. He has been entrusted with chairmanship of the House tax and pension committees. He also put his investment knowledge to work for the KSU Foundation, Kansas 4-H Foundation and his church.
Focus on KPERS
In the House, he’s served a lead role in striving to figure out how to improve the financial standing of KPERS, which manages a portfolio of around $20 billion and works on behalf of 315,000 active, inactive or retired members. The national recession prior to his election to the House and many years of insufficient state contributions to KPERS left the system with a massive unfunded long-term liability.
Johnson supported legislation enabling sale of pension obligation bonds valued at $500 million in 2021 and $1 billion in 2015. The idea was to invest the money and earn more in the markets than what was owed on the debt, which would help to boost the pension system’s bottom line.
The 2022 Legislature is considering transfer of up to $1 billion in state surplus cash to KPERS for an unprecedented one-time addition to the balance sheet. The House and Senate haven’t agreed on how to structure the deal, but both sides want to pay off about $240 million owed by the state to KPERS after skipping payments to the system in 2017 and 2019. The balance would go to the unfunded liability.
While discussing the House’s version of the bill, House Speaker Ron Ryckman gave a rare floor speech praising Johnson’s work on KPERS. Johnson was given a standing ovation by his peers.
“I started working on that problem,” Johnson said. “What are the numbers? Equations will balance — if I am short on one side, it’s not going to magically show up on the other side. That is the skill that I brought to various problems in the Legislature and that I would intend to bring to the treasurer’s role.”
Johnson also opposed Kelly’s recommendation to refinance KPERS’ liabilities in a manner comparable to a person refinancing a home mortgage. The governor had proposed the strategy to free up funding for essential state services and programs.
‘Good fit for me’
In terms of the remainder of the state’s estimated surplus of $3 billion, Johnson said consideration should be given to reducing debt owed by state government and evaluation options for tax reductions.
“There are a lot of requests for increased spending,” he said. “We want to be very careful in increasing spending with what may be one-time money from federal stimulus dollars. Similarly, there are requests to reduce taxes. And, there is room to do that.”
If elected treasurer, he said, he would reconsider the state’s approach to the unclaimed property. All sorts of assets, some left in bank safety deposit boxes, are forwarded to the state treasurer if not claimed by an heir. The treasurer’s office has a robust system for tracking down rightful recipients of those assets, but questions have arisen about how hundreds of millions in that account might be better used.
“Do we need $360 million in available funds in unclaimed property? Or can that be managed kind of like a life insurance general fund where you have the assets needed to meet the liability?” he said.
He said suggestions by Democrats he sought election as treasurer to climb the political ladder were misplaced. Three of the last six Kansas treasurers have been elected to Congress.
“Treasurer is a good fit for me,” Johnson said. “My desire is to do that job well and give people numbers that they can trust and seek to handle that office from a position of trust. If there are other offices that I would be a fit for to handle from that same position of trust, I would consider it. However, Washington doesn’t seem like that environment.”
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