Candidates for state treasurer have differing opinions on the proposed “baby bonds” plan aimed at closing the wealth gap in Washington

A dozen years after she first took office, a West Side accountant is making another attempt to unseat a sitting state treasurer.

Republican Sharon Hanek made it out of the Aug. 6 primary with 42% of the statewide vote for treasurer, making her the underdog in the race against Democratic Treasurer Mike Pellicciotti, who received 58% of the vote. The two agree that financial education should be mandatory in the state, but disagree on a bill that would close the state's growing wealth gap.

Hanek, 68, has worked as an auditor throughout her career. Hanek, a longtime Washington resident, is running for treasurer because she wants to use her 40 years of experience in financial accounting systems to fix the disarray she observed in the board's office and give back to her community.

“The one thing that separates me from not only the current treasurer but also the treasurers of the past is my strength and understanding of financial accounting systems,” Hanek told The Spokesman-Review in a telephone interview. “We repeatedly notice that there is mismanagement of funds. A large part of this is due to the so-called lack of adequate internal accounting controls.”

Hanek specifically pointed to the state's inadequate documentation of billions of dollars in relief spending related to the COVID-19 pandemic. She vowed to take a look at who is responsible for state agencies, particularly those named in recent audits.

Pellicciotti, 46, was elected to office in 2020 after serving two terms as a state representative. The Democrat said the returns on investment for local governments in the state are 50 times higher than they were in 2021, when he took office. Pellicciotti is running for another term, he said, to continue his work on financial literacy and stability for citizens.

He referred to his experience.

“There is no greater experience than being state treasurer than being state treasurer,” Pellicciotti said in an interview. “As someone who has always rejected all corporate campaign contributions, I am permitted to propose policies that put the financial interests of the people above corporate interests.”

When Pellicciotti led the treasurer's office for the past four years, he said he was proud that the state received a “AAA” rating from Moody's credit rating system during that time. He also said that his office's refinancing of existing bonds to redirect more than a half-billion dollars that would otherwise flow to Wall Street back into the state was something the state's residents would face “for years to come.” will help.

Last year, Pellicciotti introduced a bill to state lawmakers called the Washington Future Fund that would create trust funds for low-income babies born in the state. The proposed law, nicknamed “Baby Bonds,” would provide money for the approximately 40,000 children born each year through the state’s Medicaid program, Apple Health.

That number accounts for nearly half of the babies born in Washington each year.

Pellicciotti's baby bonds law was modeled after Connecticut and Washington, D.C., which recently passed their own baby bonds laws to address centuries-old racial and economic inequalities in the United States. Children eligible for baby bonds receive access to a trust fund from age 18 until age 35 that can be used to purchase a home, start a small business or pursue higher education.

The Washington Future Fund did not make it through the state Legislature this year, but Pellicciotti said if he is re-elected, demanding that it become law is high on his to-do list.

“I am very passionate about creating economic opportunity and economic empowerment for the people of our state,” Pellicciotti said, adding that along with the Baby Bonds Act, he would like to pass a law requiring financial education at all high schools schools in Washington.

Hanek criticized the proposed baby bonds law, saying she believes there are some good programs, but the baby bonds idea negates the need for people to have “individual responsibility.”

“Sometimes when you start just giving away money, like baby bonds, I'm a little afraid that it will just become a gift,” Hanek said. “I would like to see things given away not just because you are born, but because you have a purpose.”

Hanek said she agrees with Pellicciotti's proposal to teach financial education in schools, but she will look to expand that program to young adults up to age 25.

As it stands, the proposed baby bond law would require the state to set aside $4,000 for each child born with Medicaid to access it from ages 18 to 35.

Hanek argued that the baby bonds program would be unfair to babies who are not born with Medicaid but still end up needing help. She said the concept of the plan is good, but she would like to see a different system for determining who is eligible for government assistance.

Pellicciotti argued that today, more than 40% of Washington residents are unable to set aside money, let alone set up savings accounts or buy stocks, often making it impossible to overcome financial hurdles such as college or technology School that is required to start earning money.

Before entering politics, Pellicciotti worked as an assistant attorney general, assistant district attorney and clerk of the state Supreme Court. He also received a Fulbright Scholarship for Economic Development. He holds a bachelor's degree in business administration and a law degree from Gonzaga University. The treasurer currently serves on a five-member state committee tasked with helping citizens save for college and other educational expenses.

In 2016, Hanek was elected to the Pierce County Charter Review Commission. Four years earlier, she had filed for state treasurer, which earned her enough votes to advance to the general election, but she was defeated by then-Democratic incumbent Jim McIntire. Hanek earned her chartered accountant license in 1980. She holds a bachelor's degree in business administration and accounting from the University of Washington.

The Washington State Treasurer serves a four-year term and manages the state's investments, checkbooks, and debts.

General election day is November 5, and ballots for Washington will be mailed in mid-October. Voters must mail their ballots postmarked November 5th or earlier or drop them into official county-designated drop boxes no later than 8:00 p.m. on Election Day.