Close to Home: Meeting public challenges with public banking
Pete Golis reminded us once again of the stubborn gap between politicians' promises and actual achievement of public goals (“State of the State: Waiting for more than promises,” Feb. 23). Let's have a look at the two greatest challenges facing Sonoma County - the homeless crisis and the climate crisis - and ask ourselves how they are connected and what potential solutions exist.
Both challenges are extremely serious and notoriously intractable. They leave us wringing our hands in dismay, unable to agree even on approaches let alone concrete solutions.
It's time to recognize an unpleasant fact: There is no short-term solution. Like it or not, we shall continue wringing our hands about climate collapse, and continue pushing homeless camps hither and yon, until viable longer-term solutions have been implemented. Those solutions will require a huge dose of courageous new thinking.
The Friends of Public Banking Santa Rosa encourage county supervisors to agree on certain essential principles as we struggle with the two challenges. The board already has agreed that we face an urgent climate crisis and decided in principle to divest Sonoma County's investment pool funds (totaling approximately $2.8 billion) from banks and other financial institutions doing business with immigrant detention centers or the fossil fuel industry. Meanwhile, the supervisors are addressing the homeless situation, at least to the extent of setting up transitional housing for the Joe Rodota Trail campers at the Los Guilicos county site. Kudos to the board for these actions.
However, these measures are temporary, and longer-term solutions will be costly. We must identify clear signs indicating innovative and realistic paths forward.
Enter Assembly Bill 857, the recently adopted California public banking law. It sets the framework for an innovative, cost-saving approach to financing public priorities like climate change reduction and eradication of homelessness.
AB 857's most practical innovation is to decouple public-benefit funding from for-profit banks. By law, public banks are now obligated to issue loans for the creation of public benefit rather than to increase stockholder profit. Functioning as depositories for funds owned by public agencies (in Sonoma County's case, the $2.8 billion in pooled investments referenced above), public banks can originate loans at low-to-no interest to finance the implementation of societal priorities.
In light of the above, Friends of Public Banking Santa Rosa ask that the Board of Supervisors amend the county's investment policy in one small but powerful way: by specifying that a significant portion of its investment funds - 33% perhaps - will be deposited in a public bank or banks, once the latter have been vetted and chartered by the state Department of Business Oversight. Several large cities and regions are working to develop business plans for public banks. A “depositor's pledge” from Sonoma County would aid them significantly as they strive to meet the capitalization and collateralization criteria specified by law.
It would be great if we already had a public agency tasked with providing affordable money to finance our housing and climate needs. Thanks to AB 857, given committed support from local agencies like our county supervisors, we now have a chance to create just such institutions. Our long-term and short-term needs will no longer go begging for financing once we've made that commitment to public banking.
Philip Beard is a member of the Friends of Public Banking Santa Rosa.
You can send a letter to the editor at email@example.com.