[Occupymendocino] In Show of Direct Democracy, Vermont Pushes for Public Bank

[edward Oberweiser]

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*https://portside.org/2014-03-10/show-direct-democracy-vermont-pushes-public-bank
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Jon Queally, staff writer
March 6, 2014
Common Dreams

Fifteen towns approve resolution that would establish bank that works for
people of Vermont, not Wall Street.



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By a more than three-to-one margin on Tuesday, communities voting on
whether to support the creation of a public bank in Vermont approved the
idea, calling for the state legislature to establish such a bank and urging
passage of legislation designed to begin its implementation.

In a show of direct democracy that also exposed the citizenry's desire for
a more localized and responsible banking system, fifteen of nineteen towns
passed the resolution during 'Town Meeting Day'-- an annual event in which
voters choose local officials, approve municipal budgets, and make their
voices heard on a number of measures put before local residents for
approval.

The specific proposal under consideration, Senate Bill 204, would turn an
existing agency, the Vermont Economic Development Authority, into a public
bank that would accept deposits and issue loans for in-state projects.
Currently, the only state in the U.S. to maintain a public state bank is
North Dakota. However, since the financial downturn of 2008, other states
have looked into replicating the North Dakota model as a way to buck Wall
Street while taking more control of state and local finances.

Voicing his support of the measure ahead of Tuesday's vote, Gary Murphy, a
resident of South Ryegate, one of the towns that subsequently approved the
measure, explained the thinking behind the plan this way in a letter to the
local Times-Argus:

    Senate bill 204 would expand the Vermont Economic Development Authority
to become a state bank and would start out by depositing 10 percent of
Vermont's unrestricted money into the state bank. The bank would be able to
leverage this money by means available only to banks to bolster the economy
of the state and cut down on the interest payments and fees that are
presently paid to out-of-state financial institutions and other entities.
The bank would not engage in retail banking and would not compete with
community banks; it would work with community banks to maintain their
viability and expand their ability to help create better economic outcomes
for Vermonters by partnering with them in projects they would not be able
to engage in on their own.

    Presently, large public projects are, to a large extent, funded by
bonding and other private investment which requires the state to pay
interest and fees that often do not get recycled into the local economy.
Bond sales are managed by Wall Street firms, which seem to rig everything
they can to further enrich themselves. In addition to the fees that they
charge for this service, it is possible that they are rigging the process
to divert funds that would otherwise be available to the state into their
own pockets. While the cost of bonding is relatively cheap now, it will
likely increase in the next few years if not sooner and the bond market
could dry up. Creating a state bank now and growing it could put us in a
position where we can substantially lessen the need to float bonds to fund
large public projects.

According to Vermont Public Radio, unofficial results on Wednesday showed
the following towns had approved the resolution: Bakersfield, Craftsbury,
Enosburg, Marshfield, Montgomery, Montpelier Plainfield, Putney, Randolph,
Rochester, Royalton, Ryegate, Tunbridge, Warren, and Waitsfield. The four
towns that voted down the measure were: Marlboro, Barnet and Fayston and
Greensboro.

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