By MARI JORGENSEN
Public Banking Legislation is to be introduced during the January legislative session.
We need your support! If you are not familiar with this issue, please read on…
New Mexico Can’t Afford to Bank on Wall Street! We don’t have much water. We don’t have much grass, our timber is limited, and our mineral resources are being depleted at an alarming rate. These limited resources are being exploited for the benefit of very few people – many of whom have no interest in what makes New Mexicans proud of the state we call home.
The same is true of our money. Right now, revenue from income taxes, property taxes, mineral and grazing leases, speeding tickets, etc., are being deposited in Wall Street Banks that use our money to fund investments elsewhere while charging us for the privilege of not having access to it.
“It’s not what you earn, it’s what you keep” is a saying many of us know and it applies to our State Revenues. – Because New Mexico doesn’t currently have the revenue streams some other states have, we must “keep” every penny we make. We can do this by “closing our accounts” in the risky global banking world and depositing New Mexican money in a New Mexico Public Bank.
With our money deposited in our own public bank those deposits can be leveraged to benefit New Mexico’s local economic development. Unlike a “retail bank” where you and I have accounts, a public bank would have only one depositor: The State of New Mexico. Those deposits would be made available to New Mexico’s community banks, credit unions and Community Development Financial Institutions who would, in turn, manage loans to small businesses getting started, mid-sized businesses ready to grow exponentially, and to cities, counties and municipalities as a more affordable way to pay for infrastructure such as roads and schoolrooms, and public utilities like rural broadband.
Some say there isn’t enough demand for loans currently available through existing banks. That’s partly because of the criteria they use for lending. By reordering the same measurements used by Wall Street, a Public Bank could evaluate risk more effectively. One example might be to make loans easier to repay by offering longer terms to projects that create jobs or reduce our need to extract minerals.
A Public Bank is not a radical new idea. The Bank of North Dakota was started over 100 years ago to solve the financial needs of farmers and ranchers who were being squeezed by the owners of grain silos, the railroads, and the banks. Today the Bank of North Dakota provides favorable lending within the state and pays the profits generated by lending (more than $600 million in recent years) to its only shareholder — the people of North Dakota! North Dakota also has benefitted from an increase in community banks just as community banks throughout the USA are being absorbed by Wall Street Banks.
Public banks work successfully with private banks in many countries, including Switzerland, Germany, India, China and Brazil.
Legislation will be introduced during the January legislative session – it’s an idea whose time is past due. Now is the time to contact your legislators and let them know you agree.
Information about Public Banks and how to support them is available at www.aflep.org.
Contact information for our state legislators:
Senator-elect Leo Jaramillo – District 5