2010 Candidate Interview: William H. Campbell (R-MD)

William H. Campbell is the second Republican candidate to throw their hat in the ring for Comptroller of Maryland. Campbell is the former Chief Financial Officer of Amtrak serving from 2007 to 2009. Prior to that, he served as CFO for the U.S. Department of Veterans Affairs. Campbell’s experience in the private and public sector make him an interesting candidate for Comptroller. Campbell was willing to answer some of my questions about his views and his campaign.

Matthew R. Newman: Why did you decide to run for Comptroller?
William H. Campbell I have spent the last two decades as a Chief Financial Officer (CFO) in large, complex organizations (such as the U.S. Department of Veterans Affairs, U.S. Coast Guard, and Amtrak) improving financial performance and stewardship. Each of these organizations had severe financial challenges that adversely affected their ability to carry out their primary missions. In my opinion, Maryland is on the brink of a financial disaster that can only be avoided by immediate action to cut the size and cost of State government, enact tax and regulatory reforms that will stimulate economic growth in the private sector (particularly for small businesses), and create sustainable job growth. Without a change in the State government leadership (including the Comptroller) these reforms will not occur. I cannot sit on the sidelines and allow the situation to careen out of control. I have the requisite skills, experience and passion for public service to make the necessary difference.

MRN: How do you feel that your experiences in the private sector would apply to the position of Comptroller?
WHC: My experiences have been in both the private and public sector. I have managed annual budgets of up to $65 billion (B) and 225,000 employees; numbers significantly greater than the State of Maryland. Over the past two decades the financial oversight, accounting, and reporting in Federal, State and local governments has aligned itself to closely follow the best private sector practices. There has been more emphasis on accountability and transparency to ensure that taxpayers know what their money is buying and what value they are receiving. I do not believe that anyone in Maryland can understand the value that they are getting from the State. I will work diligently to ensure that the taxpayers become smarter consumers of State programs and services.
MRN: What are your thoughts on the incumbent Comptroller, Peter Franchot?
WHC: I do not know Mr. Franchot well. We met this past February at the Association of Government Accountants National Leadership Conference, and I spoke with him about the financial issues facing Maryland. I was deeply disappointed in his responses, and I did not believe that he had the skill set to fix the problems. That conversation was the point at which I decided to get in the race to replace him. He appears to be an intelligent, dedicated person, but he is a career politician and as a Delegate helped to create the current situation. In addition, his energies appear to be focused on issues that are not central to the Comptroller’s duties. If your loved one needed a lifesaving surgery, would you engage a “good general surgeon”, or would you hire the “best specialist” available? I will place my credentials as an outstanding senior financial executive against Mr. Franchot’s and any other candidates for Comptroller.

MRN: On your website, you mention that you want to help in “…exposing false assumptions and shoddy analysis.” Can you explain some of the false assumptions/shoddy analysis that the current administration have implemented?
WHC: In my opinion the Maryland State fiscal year (FY) 2011budget is very interesting reading. Some of the programmatic reductions to the budget do not look credible. The $170 M cost estimate reductions for Medicaid may have unintended consequences with Maryland medical providers refusing to see needy patients. Some of the reductions violate statutory fund requirements. In total the State will spend $13.2 B, but only raise $12.6 B. The resulting $600 M shortfall is made up by using reserve funds, special accounts and bond funding instead of current revenues. It is never a good idea to pay current expenses with debt. Projections by the Maryland Budget & Tax Policy Institute predict rising deficits and a cumulative shortfall over the next 4 years of $8.3 B. These facts (and others) clearly support my conclusion that false assumptions and shoddy analysis have a prominent place in the FY2011 State budget.

MRN: If elected, how would you use your position on the Maryland Board of Public Works to help support your fiscally conservative agenda?
WHC: In each of my CFO roles I have also been the Senior Procurement Executive and been responsible for procurement policies, operations and oversight. I have a proven track record for eliminating procurement waste and reducing costs. While Deputy Commander for Engineering and Quality at the Naval Supply Systems Command I fixed the Navy’s spare parts procurement problems ($600 toilet seats and $400 hammers). Over six years I reduced future costs by $2.6 B and received $100 million (M) in refunds for overpriced spares. At Veterans Affairs I used to buy $6 B worth of pharmaceuticals each year for only $3.5 B. I would use this experience to ensure that Maryland leverages its purchasing power to receive the best deals possible.

MRN: If elected, what necessary measures would you implement to help promote “…fairness and transparency” in your office?
WHC: Budget transparency is a simple concept. It requires that taxpayers understand what their tax obligations are, and what the funds will be used for. The Maryland tax environment is a patchwork quilt of obscure and often hidden taxes that no citizen could possibly understand, and many tax preparation professionals do not either. As an example, take the case of a small business owner (of a limited liability company) who wants to buy equipment to expand their business. This equipment is subject to personal property tax, but neither the business owner, nor their tax preparer can estimate the tax bill. The business owner will submit the equipment costs to the State to calculate the tax obligation at a future date. How can the business owner budget for an unknown tax? This often results in businesses not purchasing equipment and reducing revenue for equipment vendors. As far as tax fairness every citizen and business should pay their fair share of the tax burden, however, it has been documented that many corporations have not paid their taxes. Inconsistent enforcement makes a fair tax system impossible to achieve.

MRN: What is your opinion of the “Tax Fairness Initiative” implemented by Franchot/O’Malley in 2008?
WHC: The Tax Fairness Initiative has some admirable aspects. I strongly support the upgrade of improved technology for managing tax receipts (this is long overdue), but I have no confidence in the projected costs of the upgrade. The concept that tax laws would be fairly enforced is admirable, beyond the reach of the initiative. Unfortunately the current tax system does not appear to be very fair, and minor improvements like this initiative are inadequate to achieve its stated purpose. We need a complete reform of our tax system to ensure that crucial public services are fully funded, and the taxes imposed are justified and transparent to the taxpayers.

MRN: Apart from the Board of Public Works, the Comptroller is a member of a variety of influential State boards. How would you use your position on those boards to influence State policy?
WHC: The Comptroller has at least 18 critical statutory roles. The most important of these are membership on the Board of Public Works, Board of Revenue Estimates, Industrial Financing Development Authority, State Chartered Banks Board, Capital Debt Affordability Committee, Employees Health Insurance Advisory Committee, and the Board of trustees for the Retirement and Pension Systems. I would insist on well documented, quantitative based analysis of all proposed expenditures and costs. I would use my considerable experience to ensure that we do not commit the State to unsustainable financial burdens. I have the requisite skills to provide effective and adequate fiduciary oversight to these entities.

MRN: What do you feel is the most important issue facing the State of Maryland?
WHC: In the short term it is reducing the size and cost of the State government. Failure to implement a strict austerity program in FY 2012 will force across the board cuts that will savage critical programs. It will take a reduction of approximately $2 B per year just to balance future budgets. In the long term we need reductions in personal and business taxes to stimulate growth in the private sector and create sustainable job growth. Business (particularly small businesses) will be crucial in making up for the inevitable reductions in Federal employment and revenue that will occur when the U.S. government reduces its budget deficits in the next few years. At present Maryland receives at least 25% of its operating budget from the Federal government. This is a recipe for disaster.

MRN: What policies would you promote if elected Comptroller to help strengthen Maryland’s economy?
WHC: Like water flowing from higher to lower elevations, businesses relocate from areas of higher costs (including taxes, regulation and fees) to lower cost States. We must make Maryland economically attractive for businesses. Our goal should be to be a lower cost State for the private sector. I would engage business leaders to solicit their ideas on what tax and regulatory reforms would be most effective in growing the State’s gross domestic product. Work with the Governor and Legislature to reform our business tax systems, fees and regulatory burden. Regulatory reform would focus on unnecessary burdens while ensuring that environmental, safety and health safeguards are maintained. An example is the $300 annual filing fee for most small businesses, and the $100-200 cost of having a Registered Agent to receive legal documents. This is a questionable burden that inhibits businesses.

MRN: What do you feel are the most important aspects of the Comptroller’s Constitutional role to exercise the “…general superintendence of the fiscal affairs of the State?”
WHC: The framers of the Maryland Constitution clearly envisioned the role of the Comptroller as the State’s Chief Financial officer (CFO). The Comptroller should involve themselves in every aspect financial policy, operations, oversight and stewardship. The Comptroller must balance the authority and responsibility of their CFO role, with the necessity of building bipartisan coalitions with the Governor, Treasurer, and Legislature to properly manage the State’s finances. I have two decades of successful experience as a CFO of large complex entities that faced significant financial challenges. I have been able to balance the CFO’s fiduciary responsibilities with the appropriate amount of pragmatic compromise to maintain my independence and get the job done.

MRN: In closing, what is something you’d want to ensure that potential voters know about your campaign?
WHC: I have the experience, competence and energy to successfully perform all of the Comptroller’s considerable statutory roles. I will hit the ground running so that the FY 2012 budget (and subsequent budgets) will be truly balanced. I will serve the public faithfully and to the fullest extent of my abilities, and help change Maryland’s economic future for the better. I will truly serve the public in an honorable and evenhanded manner, and maintain the trust of our citizens.

I thank Mr. Campbell for his time and willingness to answer my questions. I wish him luck in his campaign. If you are interested in learning more about his candidacy, you can check out his official website here.

Cross-posted from Old Line Elephant