DALLAS -- Four months after being appointed, Texas Treasurer Martha Whitehead has announced she will work to abolish her $79,274-a-year job and her state agency if she wins election to the post in 1994.

"I will have as my number one priority the elimination of this agency as we know it, and I hope to oversee its downsizing and ultimate merger into the state comptroller's office," she said.

Whitehead said she has been examining how to save taxpayer dollars since she began as state treasurer in July, replacing Kay Bailey Hutchison who took over a U.S. Senate post.

"I am convinced that we can save $3 out of every $4 we currently spend -- in any way, shape, or form -- on Treasury operations," Whitehead said in a statement made Monday. She said she could not provide a precise figure on the savings from abolishing the state Treasury.

The agency now has an annual budget of $11 million and employs 260 workers. But, Whitehead said, "I think the state of Texas is at a point where we can operate a high-yield investment system and a cash management function without the tax burden of an entire state agency to go along with it."

If elected, she said she would draft a bill and support state legislation to do away with the state Treasury. She also would push for voter approval o a constitutional amendment, which is required to abolish the agency.

Texas Gov. Ann Richards, who appointed Whitehead, applauded the treasurer's position and called it a culmination of programs and discussions that began 10 years ago when Richards herself was state treasurer.

"For example, many of the Treasury functions are now automated," Richards said in a prepared statement. In addition, she said, "Through an extensive overhaul of the agency, we eliminated and consolidated functions so that the interaction with the comptroller's office was expedited."

Richards said the necessary checks and balances between the agencies could be maintained. "This action is another step forward in making government do more with less," the governor said.

But critics have said it takes away some of the state's financial safeguards.

"Separation of power is a check and balance to protect the integrity of the state system of managing money," Karen Hughes, executive director of the Texas Republican Party, was quoted as saying in a Dallas newspaper.

And Hutchison said she doubted the proposal would save taxpayer money.

The Texas treasurer oversees the state's cash and securities, and helps to locate owners of unclaimed property. It handles $16 billion in investments for state funds and collects taxes on cigarettes and tobacco.

While essential Treasury functions would be shifted to the comptroller's office under the plan, Treasury spokesman Monte Williams said some duplicated services and staff members could be eliminated. For example, support staff could be consolidated and one state building freed up, he said.

Whitehead said she feels the consolidation is the right move. "I think the people of this state are desperate to see this kind of thing actually happen," she said, "so that's what I'm going to do."

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