[Occupymendocino] Vermont public bank

[ELLEN ROSSER]

OPINION
Vermonters support state public bank, and you should too
by Gwendolyn Hallsmith<http://america.aljazeera.com/profiles/h/gwendolyn-hallsmith.html>
 @ghallsmith <http://www.twitter.com/ghallsmith> March 10, 2014
Citizens across state vote to use local dollars to help economy, not Wall
Street
Topics: Economy<http://america.aljazeera.com/topics/topic/categories/economy.html>
 Vermont<http://america.aljazeera.com/topics/topic/us-location/vermont.html>
 Banks <http://america.aljazeera.com/topics/topic/issue/banks.html>
<http://america.aljazeera.com/opinions/2014/3/vermont-state-publicbankvotefinance.html#>
<http://america.aljazeera.com/opinions/2014/3/vermont-state-publicbankvotefinance.html#>
<http://america.aljazeera.com/opinions/2014/3/vermont-state-publicbankvotefinance.html#>
[image: Vermont town meeting]
Town Clerk Sharon Draper, right, and Town Moderator Jon Gailmor preside
over 2013's town meeting in Elmore, Vt.Toby Talbot/AP

Local democracy in Vermont remains untainted by modernity. In small towns
all over the state, people gather in meeting halls, school cafeterias,
community centers and churches to hold the annual town meetings on the
first Tuesday of March. Every registered voter is welcome; outsiders are
not. Except for the clothes people wear, the comfort of central heating and
occasional cable TV cameras, these meetings look and sound much as they did
150 years ago.

It was in this public-spiritedness that over 20 towns considered a
resolution at this year's meeting on March 4 to direct their legislators to
create a state bank for Vermont. The vote does not have legally binding
effects. It is only advisory. But it offers a important indicator of public
sentiment on legislation being considered. The bills pending before
both<http://openstates.org/vt/bills/2013-2014/H627/documents/VTD00007730/>
 houses <http://www.leg.state.vt.us/docs/2014/bills/Intro/S-204.pdf> of the
Vermont state legislature would transfer 10 percent of tax dollars to a
publicly held agency, VEDA, the Vermont Economic Development Authority, and
would give VEDA a banking license. The proposal would completely transform
the way state revenues are used to finance public services.

Right now, the state deposits its revenues in large, private banks such as
Toronto-Dominion (TD) Bank and People's United Bank. Vermont's smaller,
state-chartered banks do not have the capital or collateral to back the
state's $350 million average daily balance. As a result, Vermonters' money
is put to work outside Vermont and in ways they may not support. In TD
Bank's case, money has been invested in the Keystone XL pipeline, a project
a lot of Vermonters oppose. At the same time, the state borrows the money
used for economic development and infrastructure projects from Wall Street
investment banks. If the proposal succeeds, Vermont will join North
Dakota<http://www.nytimes.com/roomfordebate/2013/10/01/should-states-operate-public-banks/why-public-banking-works-in-north-dakota>
as
the second state of the union with its own public bank. In 18 other states,
including California -- where Ellen Brown, president of the Public Banking
Institute <http://publicbankinginstitute.org/>, is currently a candidate
for treasurer -- there are proposals for public banks being considered at
the state or the city level. Arizona just chartered a commission to study
the issue, and Reading, Pa., is in the process of establishing a city
public bank.

A small, grass-roots organization I co-founded, Vermonters for a New
Economy, sponsored a study by the University of Vermont's Gund Institute
for Ecological Economics and the Political and Economic Research Institute
at the University of Massachusetts to determine the economic impact on
Vermont of a state bank. The study demonstrated that a public bank that
kept Vermont's tax dollars in the state and used those dollars for economic
development and infrastructure would create over 2,500 jobs, more than $190
million in value-added productivity and more than $340 million in gross
state product. For a state of 600,000 people with $27 billion in annual
GDP, these are substantial economic improvements, amounting to a 1.26
percent boost to growth.
If a Vermont public bank is organic, grass-fed and pesticide-free, then I
say we should all support it.

Charlie Hosford

former Waitsfield Select Board member

Despite these benefits, the legislature has not yet moved forward with the
proposal. Last week the Senate Government Operations Committee voted to
send the bill to the Senate Finance committee with a favorable
recommendation. Lobbyists for the large banks oppose the idea, and
Secretary of Administration Jeb Spaulding, VEDA CEO Jo Bradley and State
Treasurer Beth Pearce -- all officials who work closely with the banks --
have parroted the bankers' objections, making the opposition of a few seem
like a broad consensus at the highest levels of state government.

To counteract the bank lobby in Montpelier, Vermonters for a New Economy
brought the question directly to the voters. Activists circulated
petitions, held educational workshops and produced and distributed
materials. In October during a national event called New Economy Week,
towns all over the state hosted kickoff events for the town meeting
campaign for a state bank.

The bankers and their lobbyists didn't like the approach. (One of the
lobbyists also happened to be the mayor of Montpelier.) But voters loved
the idea. In 17 towns around the state, a vote to endorse the idea of a
public bank passed overwhelmingly last week at the town meetings. In
Montpelier the article on the ballot in support of public banking passed by
a wide margin and got more votes than the mayor did in his bid for
re-election. The vote also passed in Albany, Bakersfield, Calais,
Craftsbury, East Montpelier, Enosburg, Marshfield, Montgomery, Plainfield,
Randolph, Rochester, Ryegate, Tunbridge and Warren. Only Barnet, Fayston,
Greensboro and Marlboro opposed it.

Waitsfield saw a long day of intense discussion on a wide variety of
issues. "If a Vermont public bank is organic, grass-fed and pesticide-free,
then I say we should all support it," Charlie Hosford, a former longtime
Waitsfield Select Board member, argued. Voters ended up supporting a
Vermont public bank 2 to 1. People asked a few good questions: Would
politicians run the bank? (No.) What could a public bank do that isn't
being done now? (Use Vermont's tax money to make loans and infrastructure
improvements to earn new revenue for the state.)  "A public bank for
Vermont would create jobs and allow Vermonters to take control over our
financial destiny at a time when everyone agrees that Wall Street's
corporate commercial banking model is deeply flawed at best," said Rob
Williams, a Waitsfield town resident and citizen advocate for the public
banking effort.

The ultimate decision now rests with the statehouse. Whether legislators
will take up and approve the resolution is an open question. The banking
lobby and its friends in the governor's mansion have the media and the
larger megaphone. Vermonters for a New Economy continues to hope that the
legislature takes the common-sense wisdom of Vermonters more seriously than
the self-interest of the big out-of-state banks and their supporters. Time
will tell, but whatever the result, a new chapter for public banking opened
in Vermont last week, and the idea is bound to spread. There is no good
reason for the people's money to be used in ways that don't benefit the
people.

Gwendolyn Hallsmith is co-founder of Vermonters for a New Economy and
acting executive director of the Public Banking Institute.

The views expressed in this article are the author's own and do not
necessarily reflect Al Jazeera America's editorial policy.
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