Office of state treasurer could be abolished

Bill to strike references to office from constitution barely passes through Senate

By Kevin Wheatley, Published:

A bill that could abolish the office of treasurer eked through the Senate Tuesday with just enough votes to advance.

Senate Bill 58, a proposed amendment striking all references to the treasurer’s office from the Kentucky Constitution, passed 23-15 after sharp debate on the relevance of having a state treasurer. The 23 votes is exactly the three-fifths majority needed to move constitutional amendments through the Senate. One GOP senator, Sen. Brandon Smith, R-Hazard, joined Democrats against the measure.

Some said the office is antiquated and could be absorbed within state government while others said the treasurer recovers millions for the general fund and is an important ally in keeping the executive branch in check.

Sen. Chris McDaniel, R-Taylor Mill, said SB 58 would save $1.4 million per year by transferring the office’s duties to the Finance and Administration Cabinet and the auditor’s office, plus an additional $600,000 to $650,000 as the treasurer’s staff is absorbed in state government.

But opponents of the bill, including Senate Minority Floor Leader R.J. Palmer, D-Winchester, said the treasurer’s office not only returns millions in unclaimed property, it keeps executive branch spending under control.

“The state treasurer is the last check to make sure that no dollars are expended by this administration or any other administration that wasn’t authorized by the General Assembly,” he said. “Now, for me, if you house that function in an administrative office of the executive branch … that certainly seems like the fox guarding the henhouse.”

Treasurer Todd Hollenbach would be allowed to serve the rest of his final term if SB 58 passes and voters approve the constitutional amendment, but he said claims of cost savings were “pulled out of thin air and other nether regions of non-existence.”

Transferring the treasurer’s duties to other areas of state government would lead to bloated agencies, he said.

“Most importantly, the supporters of SB 58 want to take away the constitutional right of the people to vote for the individual who oversees the handling of their tax dollars and remove a vital part of Kentucky’s constitutional system of checks and balances, to stop unauthorized spending by the executive branch,” Hollenbach said in a statement.

Senate President Robert Stivers, however, said cutting the treasurer’s office would increase efficiency in state government.

“We’re talking about tax revenues, we’re talking about revenues from gaming, why don’t we look at some common-sense approaches where we can instill checks and balances but still save a million and a half dollars a year?” said Stivers, R-Manchester.

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