State bank legislation passed in CA

[eridani]

AB 750, California's bill to study the feasibility of establishing a state-owned bank that would receive deposits of state funds, has passed both houses of the legislature and is now on the desk of Governor Jerry Brown awaiting his signature.

It could be the governor's chance to restore the state to its former glory. As noted in Time Magazine:

"n the 1950s and '60s, California was a liberal showcase. Governors Earl Warren and Pat Brown responded to the population growth of the postwar boom with a massive program of public infrastructure--the nation's finest public college system, the freeway system and the state aqueduct that carries water from the well-watered north to the parched south."

But that was before Proposition 13, a California constitutional amendment enacted by voter initiative in 1978. Prop 13 limited real property taxes to one percent of the full cash value of the property and required a two-thirds majority in both legislative houses for future increases of any state tax rates.

Prop 13 radically reduced the tax base, and it would be difficult to raise property taxes now. The tax savings simply drove property prices up, getting capitalized into additional debt service to the banks. Today, a rise in property taxes would lead to even more foreclosures and abandonments, reducing tax revenues even more.

Meanwhile, the state is struggling to meet its budget with a vastly shrunken tax base. What it needs is a new source of revenue, something that won't squeeze consumers, homeowners, or local business.

A state-owned bank can provide that opportunity. North Dakota, the one state that currently has its own bank, is the only state to be in continuous budget surplus since the banking crisis began. North Dakota's balance sheet is so strong that it recently reduced individual income taxes and property taxes by a combined $400 million and is debating further cuts. It also has the lowest unemployment rate, lowest foreclosure rate and lowest credit card default rate in the country, and it hasn't had a bank failure in at least the last decade.

Revenues from the Bank of North Dakota (BND) have been a major boost to the state budget. The bank has contributed over $300 million in revenues over the last decade to state coffers, a substantial sum for a state with a population less than one-tenth the size of Los Angeles County. North Dakota is an oil state, but according to a study by the Center for State Innovation, from 2007 to 2009 the BND added nearly as much money to the state's general fund as oil and gas tax revenues did. Over a 15-year period, according to other data, the BND has contributed more to the state budget than oil taxes have.


Read more at
http://www.opednews.com/articles/California-Legislature-Pas-by-Ellen-Brown-110916-76.html

[Firebrand Gary]

1. This makes me so happy that I could do a cartwheel. Woo Hoo

I have already closed all of my financial accounts with the banks (they are all in Credit Bureau now) But I could use a local bank to work with as well.

[Hell Hath No Fury]

2. Fantastic news!

:applause: We need this here, badly!

[arcane1]

3. I wish this was more than just a study

But I'll take it! :D

[eridani]

4. There's quite a vigorous state bank movement in WA too, as well as other states

In OR, the chief sponsor is a Republican.

BTW, when using the example of ND, be sure to compare that cold, thinly populated and resource rich state with similar states like AK and MT. The latter produce much more energy than ND per capita, and have 7.7% unemployment and no budget surpluses.

[Firebrand Gary]

5. Does anyone know what Governor Brown thinks of this?