State receives top grade for 23rd consecutive year

State Treasurer Colleen Davis announced today that the nation’s three top rating services have all delivered the highest possible rating to Delaware. After presentations from the Office of the State Treasurer, Department of Finance, Office of Management and Budget, and the Governor’s Office, Moody’s, Fitch, and S & P Global Ratings all returned a Triple-A rating.

“The rating signifies Delaware’s ability to meet its financial obligations,” said Treasurer Davis. “It reflects our creditworthiness and allows the State to repay bonds at a lower cost and is a representation of our financial health and management practices.”

Highlights of the evaluation reports include:

• Healthy budget reserves, liquidity, and generally accepted accounting principles (GAAP)
• Recent strong growth allowing the state to fully fund two reserves to a combined 12% of revenues.
• Strong financial management and governance indicated by frequent revenue forecasting and a statutory limit on spending
• Lower business costs and the cost of living relative to neighboring states that could continue to attract new residents.

In its evaluation, Moody’s commented, “The State of Delaware maintains a strong credit position supported by healthy and stable finances, and strong management and governance. The state’s well-established process for monitoring revenue and its statutory limits on annual spending growth are important tools that aid financial management year after year. These tools and the state’s continued growth in reserves provide a cushion should unforeseen fiscal challenges arise or persist.”

Fitch noted, “The state has exceptional financial resilience from strong financial management that has contributed to the maintenance of ample financial cushion through economic cycles.”

Standard & Poor’s provided a similar summary. “Delaware’s demonstrated history of proactive fiscal management and well-embedded strong financial policies underpin the rating,” said S&P Global Ratings credit analyst Geoff Buswick.”

“Delaware remains committed to maintaining its Triple-A bond rating,” Treasurer Davis said. “We will continue to focus on strong financial performance, sound management practices, and effective leadership to ensure we continue to earn top ratings long into the future.”

Treasurer Davis is one of four bond issuing officers in Delaware, along with the Governor, the Secretary of Finance, and the Secretary of State. The next bond sale is scheduled for on or about April 26, 2023.

State Treasurer Colleen Davis led the first in a series of public forums to spread the word about the benefits of Delaware EARNS, an upcoming program that will provide workers and employers with access to low-cost retirement savings plans, beginning in January 2025. The Delaware NAACP, the Metropolitan Wilmington Urban League, and the Police Athletic League of Wilmington joined with the Office of the State Treasurer in the event Tuesday evening at the Wilmington PAL Center.

“Taking the EARNS message to communities with many small businesses and residents who work for these businesses will help us share the value of the program,” said Treasurer Davis. “Explaining to entrepreneurs that they can open the door for their employees’ retirement savings with no cost and minimal effort can help it become a valuable tool in hiring and retaining quality workers that help keep small businesses running.”

The presentation included information on how the pending retirement crisis created the need for Delaware EARNS. Currently 39% of the State’s workforce does not have an easy way to save through a retirement program at work. Delaware EARNS addresses the situation by automatically enrolling employees into a State-facilitated retirement savings plan unless they elect to opt-out. Delaware EARNS also benefits small businesses who may not be able to offer retirement plans to employees due to the cost and administrative burden, allowing them to attract and keep good employees by offering a crucial benefit like retirement savings.

The next forum takes place May 4, 2023, at 6:00 p.m., at the Living Grace Worship Cathedral in Middletown in conjunction with the Alpha Kappa Alpha Sorority, Inc. A third will take place in June co-sponsored by AARP Delaware.

Meanwhile, the Delaware EARNS Program Board continues to meet and establish policies and procedures for the program. The Board will meet tomorrow, April 13, 2023, and again on July 13, 2023, and October 12, 2023. The Board’s three standing committees, the Program & Investment Committee, Audit, Policy & Governance Committee, and the Outreach & Engagement Committee all continue to meet and work towards implementation of the program.

To learn more about Delaware EARNS, visit de.gov/earns. For more information about the work of the Board, visit https://treasurer.delaware.gov/earns_board/.

State Treasurer Colleen Davis on Friday announced changes to her leadership team in the Office of the State Treasurer (OST).

Liza Davis, who has served as Deputy State Treasurer since 2019, has left OST to become the University of Pennsylvania’s new Associate Vice President for Finance and Treasury Management.

In her time as Deputy State Treasurer, Davis was responsible for supporting the oversight of daily operations of the office including managing the staff, assisting with oversight of an annual operating budget of $6 million, assisting with the cash and debt investment portfolio, and supporting supervision of tax-advantaged savings plans. Prior to her tenure as Deputy, Davis served as a Policy Advisor to the State Treasurer.

“Liza’s departure is the definition of ‘bittersweet,’” said Treasurer Davis. “While I am thrilled for her taking on her new responsibility, I along with everyone in the office will miss her professionalism, her work, and her presence as a guiding light. We offer both our gratitude and congratulations, and hope she realizes how much she improved our lives as a colleague and friend, but also how she improved the lives of every single Delawarean through her work.”

Jordan Seemans, who spent the past three years as the Treasurer’s Director of Policy and Communications, will replace Davis as Deputy State Treasurer. Prior to joining the Office of the State Treasurer in 2020, Seemans served as the Director of Legislative Affairs in the Office of Governor John Carney.

Since coming to the Office of the State Treasurer, Seemans made an immediate impact on the policy development and community engagement of the office. Seemans helped lead the development, drafting, and passing of the Delaware Expanding Access for Retirement and Necessary Saving (“EARNS”) Act, a milestone achievement that will help thousands of Delaware employees realize retirement security. Additionally, he oversaw the successful passage of various other legislative initiatives including a new tax deduction for the DE529 and DEPENDABLE plans. He was also instrumental in the creation of the Aspire529 program, a new program for youth experiencing or aging out of the foster care system to help them pay for expenses related to college or vocational training.

“Jordan truly has an appreciation for the work that takes place in this office. He dedicates himself in being approachable and pragmatic, and the energy and optimism that he brings with him is a critical part to the office’s success now and into the future. We are an agency that can have a tremendous positive impact on the lives of Delawareans, and that’s what drives this office every day.”

The change in the Deputy Treasurer position follows other recent promotions. Lisa Embert, the former Director of the Reconciliations & Transaction Management (RTM) Division became OST’s Chief Operating Officer after the previous C.O.O. Daniel Madrid took a position as the Deputy Director of Government Efficiency and Accountability Review (GEAR) within the Department of Finance. Brennon Fountain has taken over as RTM Division Director after serving as Controller II.

Also, unused education savings can soon rollover for retirement

“First State, First Steps,” a pilot incentive program for Delawareans offering a $100 contribution to a new DE529 Education Savings Plan account added $37,700 to accounts over the last six months of 2022.

“I am thrilled that our First State, First Steps program gave 377 young Delawareans a head start on saving for college,” State Treasurer Colleen Davis said. “Because of the project’s success, the Plans Management Board approved its extension until at least June 30, 2023.”

First State, First Steps will contribute $100 into every newly opened DE529 account if:

• The beneficiary is five years of age or younger at the time of account opening
• The beneficiary is a Delaware resident at the time the account is opened
• A minimum contribution of at least $100 is made to the DE529 account when the account is opened

Managed by Fidelity Investments, the DE529 Education Savings Plan provides tax-advantaged accounts designed to help parents, grandparents and others pay for higher education expenses. Withdrawals for qualified higher education expenses like tuition, fees, and books are federal and Delaware income tax-free.

Money in a DE529 account not spent on education costs can now continue to help with future saving thanks to the recent passage of the Secure 2.0 Act in the omnibus spending bill supported by Treasurer Davis, approved by congress and signed by President Biden at the end of December.

“The need to save for future expenses goes beyond the college years and beginning in 2024, money left in a DE529 account can be rolled into a Roth IRA belonging to the beneficiary of the 529 account,” Treasurer Davis said. “Up to $35,000 in total can be moved without penalty though funds cannot exceed Roth IRA annual contribution limits, and the DE529 account that holds the money will need to have been open for at least 15 years.

For more information on the DE529 Education Savings Plan and the First State, First Steps program, visit 529.delaware.gov.

State Treasurer shares success of Delaware’s financial practices

State Treasurer Colleen Davis spent Tuesday afternoon with members of the Tokyo Metropolitan Government and representatives of Mizuho Bank, Ltd.

Delaware’s long-standing record of strong financial stewardship led Mizuho Bank, the primary bank for Tokyo, to meet with Treasurer Davis to discuss best practices in public fund management.

“I am always willing to share some of the things that help make Delaware so successful,” Treasurer Davis said. “I am proud of our stable finances and strong management and governance and honored to help others strengthen their financial management.”

Led by Masayuki Takizawa, Director of Fund Operation for Tokyo, the delegation sought information about topics including public fund management policy, public fund investment policy, and cash management policies and systems.

“Treasurer Davis’s valued guidance on our engagement, management and investment of government funds was extremely informative,” Takizawa said. “We appreciate her time to share best practices and strategic leadership on the long-term sustainability of the three pillars of; the State’s investments, banking services, and debt management programs by selecting and building strong partnerships with world class providers.”

Director Takizawa was joined by:

• Junya Yamamoto – Public Funds Management Section, Management Division, Bureau of Accounting
• Hiroyuki Suzuki – Public Funds Management Section, Management Division, Bureau of Accounting
• Shigeyuki Fukuda – Cashier’s Section, Management Division, Bureau of Accounting
• Hidemi Saito – General Affairs Section, Management Division, Bureau of Accounting
• David Landers – Mizuho Bank, Ltd. – Managing Director, Head of US Government Affairs
• Ryo Ishihara – Mizuho Bank, Ltd. – Chief Representative, Washington, D.C. Representative Office
• Yuji Yokoyama – Interpreter

Along with Treasurer Davis, Finance Secretary Rick Geisenberger, Deputy Treasurer Jordan Seemans, and the Office of the State Treasurer’s Chief Operating Officer Lisa Embert attended the meeting.