Office of the State Treasurer

Considered the state bank, the Alabama Office of State Treasurer was established in 1819 and is the state agency responsible for the custody of all state funds and funds deposited with the state of Alabama and for paying debts owed by the state. The department also oversees the state’s retirement funds and prepaid college tuition and savings programs, as well as other tax-deductible programs. It is headed by a popularly elected individual who serves a four-year term; the state treasurer is not in the governor‘s cabinet.

Isaac Harvey Vincent Individuals serving as state treasurer were elected annually by the General Assembly from 1819 to 1861. Beginning in 1861, the treasurer was elected biennially and was elected by popular vote for a term of two years in 1868. The 1901 Constitution mandated that the treasurer be elected to a four-year term but could not serve successive terms until a 1968 amendment changed that rule. Many of the territorial records of the Office of Treasurer were lost in a fire in December 1918, during Jack F. Ross’s tenure in the office. The department’s records prior to 1882 are incomplete and lack detailed description, but the records from 1883 to the present are more intact. Early treasurers held a variety of occupations, including merchant, engineer, farmer, and mill owner, and one was a graduate of the U.S. Military Academy at West Point, New York. Some of the more recent state treasurers have used the office as a gateway to higher elected office. All but two treasurers have been Democrats. Arthur Bingham (1868-70, 1872-75) was originally a Whig but switched to the Republican Party because of his opposition to Alabama’s secession from the Union in 1861. Future governor Kay Ivey, a Republican, served from 2003 to 2010.

To serve as treasurer, an individual must be 25 years old, a U.S. citizen for at least seven years, and an Alabama resident for at least five years prior to election. Treasurers are eligible to run for a second term. The treasurer serves as an ex-officio member of various boards, including the Board of Control of the Teacher’s Retirement System, Board of Control of the Employees’ Retirement System of Alabama, Higher Education Loan Commission, Alabama School and Junior College Authority, and Coosa Valley Development Authority. The state treasurer also serves as the chairperson of the board for the Prepaid Affordable College Tuition (PACT) program.

Young Boozer The Alabama Treasury assumes various obligations and duties, including receiving and depositing all money due to the state in the appropriate accounts. It records all receipts, warrants, and disbursements of funds for the state. Records of all bonds, which are general obligations of the state of Alabama, are maintained in the treasurer’s office. The treasurer also maintains records of some of the agency bond issues that delegate duties to the treasurer. The department does not hold or invest funds belonging to the teacher’s, employee’s, or judicial retirement systems of the state insurance fund. Those entities manage and invest their own funds. The treasury office distributes gasoline tax revenues and motor vehicle license revenues to the counties and cities as specified by the Alabama State Legislature. The treasurer also develops and distributes an annual report. Moreover, the state treasurer notifies the governor, lieutenant governor, speaker of the house, and members of the legislature of the availability of the financial report. The department has approximately 40 full-time employees. The average appropriated budget for the treasurer’s office during 2003-2010 was approximately $6.8 million.

Agnes Baggett The Alabama Treasury administers the PACT fund, which was created to enable individuals to purchase a contract to prepay future undergraduate college tuition and mandatory fees at a state college or university either in monthly payments or a lump sum. Participants were able to “lock in” lower tuition rates, making college more affordable. A 10-member board of directors chaired by the state treasurer oversees the program and is responsible for investing the contributions as the child ages. The economic recession of the late 2000s, however, lowered the value of the contracts as tuitions rose, prompting changes to the program, including the suspension of new enrollments and an infusion of money from the Education Trust Fund.

Another popular Treasury effort was the Linked Deposit program, a partnership between the Treasury and Alabama banks. Established in 1988, the program enabled individuals in agriculture and small business owners to borrow money at a reduced interest rate to start or expand a business. The program was suspended in 2001, however, because the interest rates were too low to make such loans viable. The department also oversees the tax-deductible Penny Trust Program, which was approved by the voters in 1990 to create a permanent fund to provide for public health initiatives and health-related public school programs. Funds have been dispersed from this program to assist the indigent and reduce the infant mortality rate. Penny Trust Fund money also may be distributed to the Education Fund to assist with disease prevention programs in the schools. As of 2010, the Penny Trust Fund was worth more than $10 million.

For much of its history, the department functioned as the main banking organ for the state and ventured into little else. In recent years, however, some treasurers have implemented various programs and updated technology. Annie Laurie Gunter (1978-87) pushed to automate office functions and began to move the office away from the use of punch cards, and George Wallace Jr. (1987-95) developed the PACT program in 1989 and oversaw its launch in March 1990.

Lucy Baxley Lucy Baxley (1995-2003) brought the unclaimed property program from the Department of Revenue to the Treasury. Under it, financial assets returned to the Treasury are held and catalogued in a database for search and recovery by claimants. Baxley also began the College Counts 529 Fund, which was approved by the voters in June 2001. Named for the section of federal tax law by which it is authorized, the 529 Fund allows individuals to make contributions toward educational expenses, including room and board. Kay Ivey (2003-11) made financial literacy a key component of the department’s efforts and concentrated on legislative changes that impact the office. Legislative changes have been made to the unclaimed property law and the Linked Deposit program and tax deductions for the PACT and 529 program participants. Ivey also enhanced the department’s website to provide more in-depth information to the general public.

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