Arora Says State’s Lack of Financial Strategy Drives Possible Treasurer Run 


TwitterFacebookCopy LinkPrintEmail

Connecticut needs a more effective long-term financial strategy, and the State Treasurer should play a more active role in setting it, said state Rep. Harry Arora, a potential candidate for Treasurer, in a recent conversation with CT Examiner. 

“The state is facing serious financial challenges on debt and pension liabilities, and I think we need a strategy so that Connecticut can get back on a path of long-term financial stability that would lead to economic growth,” said Arora, R-Greenwich, a career investment manager who has formed an exploratory committee for a possible Treasurer run. 

Arora said he believed there is an opportunity to bring a strong long-term solution to the state’s financial problems, which he said are currently “just getting bandaged up” between cyclical positives in the markets and in recent federal pandemic-relief assistance that has delivered several billion dollars to the state.   

Specifically, Arora said reducing the approximately $8 billion a year — out of a $22 billion annual budget — paid toward the state’s various debts would allow the funds to be repurposed in areas like economic-stimulus programs and even tax relief for residents. 

“If you have a good fiscal policy where you’re not spending 40 percent of our budget on past challenges and problems, then you would be able to do much better on all other counts,” Arora said. 

And, he said he would trim that debt with improved returns on the state’s investments and by advocating for more scrutiny over funding projects that require borrowing, like the construction of schools. 

He says the state’s $43 billion pension funds have not been generating the best returns possible under incumbent Treasurer Shawn Wooden for a number of reasons, including underinvestment in U.S.-based equities that have been producing robust returns. 

Arora would at least double the current 15-to-20-percent allocation to those equities that he says Wooden has made in favor of more global investments that carry more risk and international exposure. 

“This is not about being bold and what we call making bets,” he said. “This is about having a prudent investment strategy and this is one of the reasons why we have kind of underperformed.”

Arora is the founder of the Alphastrat investment firm, which specializes in researching and identifying market opportunities created by the shift from fossil fuels to clean energy, and has also worked for hedge funds Enron and Amaranth, which both failed.

He said he also would explore streamlining the state’s pension system by allowing state employees to opt out and use their annual contributions for their own private investments.  

Arora says he also would enlist the expertise of Connecticut’s extensive financial and investment community to help him shape policy – perhaps through a task force. 

“Right now we are not focusing on using the best resources our state can bring,” he said.  “Many of these professionals are quite eager to help the state think through its financial problems.”

More due diligence

On major borrowing expenses like school construction, Arora said he would use the Treasurer’s seat on the state Bond Commission — which authorizes school construction projects — to require more stringent financial analysis. 

“We have high schools being built for $200 million when the typical expense in the United States is $50 million,” he said. “There needs to be more due diligence on these projects that are being funded through long-term debt and bonding. Somebody on the Bond Commission needs to ask questions to make sure that these are funded at the right price or with some degree of reasonableness.” 

Wooden has not announced his candidacy for a second term, and Arora is the only other potential candidate to express interest in the office so far. 

Arora was elected State Representative in 2019 after winning a special election to fill the seat previously held by Greenwich First Selectman Fred Camillo. He was reelected to a second term in 2020 and is the ranking Republican member of the legislature’s Labor and Public Employees Committee and a member of the Energy and Technology and Human Services committees.

In 2018, he ran for Connecticut’s 4th Congressional District seat in the U.S. House, losing to longtime incumbent Democrat Jim Himes.

Arora said he plans to make a decision on whether to formally declare himself a candidate for State Treasurer within about two weeks. 

“The whole idea is to make sure that within the party I have a lot of discussions, not just with leaders, but with the rank-and-file with various groups,” he said. “I’ve been doing that and I have generally gotten a very positive response because people understand that you need a financial person with a financial strategist background for this job.”

Editor’s note: Due to an editing error, the second half of this story, starting with “More due diligence,” was not included in the initial published version.

Steve Jensen

Steve Jensen was a journalist for 13 years with the Hartford Courant and Journal Inquirer of Manchester before becoming a Communications Director for the State of Connecticut. Jensen covers politics and law enforcement for CT Examiner. T: 860 661-6404