The campaign to succeed retiring state Treasurer Shawn Wooden is coming down to a debate over expertise.

Republican Harry Arora and Democrat Erick Russell both insist their respective experiences leave them best qualified not only to oversee nearly $45 billion in pension and trust fund assets, but — more importantly — to maintain Connecticut’s relatively new focus on savings and debt management.

“Would you go ask your doctor for financial advice, or for a legal opinion?” said Arora, a 52-year-old Republican who has run the Alpha Strat investment management firm for the past five years and has 25 years of experience in financial services. He and his wife, Nisha, live with their three children in Greenwich.

“So much of my work ties into the treasurer’s office,” said Russell, 33, a Democrat and a partner with Pullman and Comley who has spent a decade specializing in public and private financing. “It really puts me in the position to step into the role on day one and get to work.”

That work, both candidates agree, involves building on a renewed focus at the state Capitol on savings and debt management. Where they disagree, however, is on how much of a headway Connecticut has made over the past five years in getting its fiscal house in order.

For Russell, his fellow Democrats — Gov. Ned Lamont and the legislature’s majority — have made huge strides since 2017, amassing a record-setting $3.3 billion rainy day fund and making $5.8 billion in supplemental pension payments.

The treasurer’s job is to invest those extra contributions and increase the overall value of the pension funds. A higher value means lower required annual payments, potentially freeing up hundreds of millions of dollars annually that could be used to bolster other programs, lower taxes or both.

“We need to make this a priority,” Russell said, adding that he won’t be afraid to use the bully pulpit to continue pushing for sound debt management. “We need leadership and elected officials who are going to be committed to continuing us on this path.”

But Arora, who has represented Greenwich in the General Assembly since January 2020, said the Democratic campaign message in this area is an incomplete story.

Arora says Connecticut has been investing its pension fund assets too heavily in speculative emerging markets and low-grade bonds and not heavily enough in blue chip stocks. As stocks soared between 2018 and 2021, the state did not maximize its potential investment gains, he said.

Another problem, the Greenwich Republican said, is that “we have not been on a ‘debt diet,’” despite Lamont’s frequent calls for the state to embrace such a strategy. At least on paper, Connecticut’s debt actually has grown since 2017.

That was when legislators enacted a new program that restricts the state’s ability to spend a portion of state income tax receipts tied to capital gains and other investment earnings.

But something else was happening at the same time.

Connecticut reported $95 billion in unfunded obligations last fall, a combination of bonded debt and unfunded pension and retirement health care responsibilities.

That’s almost 30% more debt than the state reported in 2016, before five years of balanced budgets, careful savings and an unprecedented supplemental pension payment.

Some of that extra debt was really always there.

The legislature adopted more conservative assumptions about pension fund investment returns over the past few years — dropping them from an annual average of 8% or more to about 7%. Pension debt is calculated over 25 or 30 years, and lowering the assumed revenue from investments means more contributions must come from the taxpayers — effectively increasing the long-term debt.

But governors and legislatures also refinanced the state’s pension obligations three times between 2017 and 2019.

Because the state failed to properly save for pensions for more than 70 years between 1939 and 2010, analysts warned required annual contributions to these funds would spike in the late 2020s.

Lamont and his predecessor, Gov. Dannel P. Malloy, worked with legislatures to smooth out those spikes, shifting billions of dollars in debt, plus interest, onto taxpayers in the late 2030s and 2040s.

But they didn’t just lower required contributions for the spike years that are still to come. They also restructured some payments in the near-term, making their own budgets easier to manage — while shifting even more burdens onto future taxpayers.

Both Arora and Russell say this practice needs to stop. Connecticut must remain focused on paying down its debt, not shifting burdens onto its children.

The two candidates also shared common concerns over the state’s current practice of using the proceeds from bond premiums to help cover annual debt service costs — effectively borrowing to pay off borrowing.

The state projects to use $151 million in borrowed funds this fiscal year to retire debt. And while the practice is scheduled to end next July, efforts to kick this fiscal habit have been deferred in the past.

Too often, Arora added, treasurers have not publicly demanded that governors and legislators avoids these types of gimmicks.

“I will make it very difficult,” he said. “I will definitely not be afraid. I will push it.”

Russell, who lives in New Haven with his husband, Chris Lyddy, stands to make history if he wins by becoming the first Black LGBTQ candidate elected to statewide office in the U.S.

He’s already the first person in his family to graduate from college or law school. And he said he learned firsthand the sacrifices many working families face while growing up in New Haven and working with his parents in their convenience store on Congress Avenue.

Russell said if elected he would be focused not only on increasing pension assets but investing state resources in ventures that increase economic opportunities for working families.

“I think there’s opportunity to make investments to help drive our economy,” he said, “making sure we’re investing in all of our communities.”

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