Public Banks for Morgantown Monongalia West Virginia

An economist could analyze Morgantown’s CAFR statement (or as the city labels it, YEFR), possibly via the review process suggested by the Public Banking Institute, below, to determine what funds the city could use to capitalize a public bank, and then to come up with a brief cost/benefit analysis showing the impact a public bank could have. Same for county and state where a public bank might make more or less or equal sense.

Largely due to the 2008 economic crisis, there’s a movement toward public banks in the US spear-headed in part by the Public Banking Institute founded in 2011

Board Chair is Walt McRee. One PBI board member is Mike Krauss in Pittsburgh. Though it has left-progressive results, the move for public banking cuts across all political lines: Krauss, for example, is former Executive Director of the Pennsylvania Republican State Committee. Here he is, a high level PA state Republican writing incongruously at occupy.com, explaining why public bank initiatives have been introduced into 20 state legislatures since the 2008 economic crisis:

and Valerie Fraser is a Republican Tea Party state Representative in New Hampshire who has been helping to move a public banking bill through the legislature:

Meanwhile the PBI founder, Ellen Brown, ran for California State Treasurer in 2014 on the Green Party ticket:

Public banks not only save money in operation, they generate dollars for the public, and greatly improve community investment. Where founded, they excel as institutions:

The shining example in the US is the only state bank, the Bank of North Dakota. (The South Dakota Investment Fund is somewhat similar.) Pennsylvania has expressed recent interest in a state bank that it would capitalize by way of its multi-billion dollar retirement account. West Virginia could capitalize a bank the same way and/or roll its nearly billion dollar “rainy day” fund into it. Public banks not only stop the drain of public funds to private entities that apply fees and make inappropriate and risky investments, they generate public monies via modest interest rates, and they greatly augment community investment. They can also slash interest rates on student loans, by up to 80 percent in North Dakota, I believe.

Currently there are strong pushes around the country for state and municipal public banks (for states and/or municipalities to deposit all of their monies into and fund their operations and initiatives through), including in Philadelphia for a city bank, and an even stronger push in Trenton, New Jersey, which now is said to have a highly favorable city government/management. Something like 18 cities in Vermont have called for a public bank. There is activity on the issue from coast to coast, and it seems natural to take initiative on the matter here, where the reality of a financial crisis has been made apparent in the course of several South Morgantown neighborhoods’ recent efforts to block or manage an impending adjacent housing development that violates both the City and the County’s (unenforceable) Comprehensive Plans and that would destroy a forest that is engulfed by 3 of the city’s 7 Wards. The city and the county lack the money to buy and preserve the forest per their Plans, incorporating it into the BOPARC trail and park system and helping to link White and Marilla Parks. The city and the county lack the money due to largely they own failings, as well as that of the state. This financial lack breaks down as follows, from local to state, immediate to longer term:

  • Morgantown’s lack of a dedicated revenue stream to parks and recreation allowed by state code but non-existent locally;
  • Morgantown’s lack of annexation of several commercial corridors, and residential areas, that would generate tremendous revenue, especially B&O and property taxes but now also multi-million dollar service fee given the recent passage of the streets and police fee;
  • lack of public banking (at the city, county, and/or state level) which bleeds bank fees and bank profits away from the public and undercuts community investment in multiple ways;
  • lack of progressive taxation, not least in regard to income and the severance tax

Government and citizen groups should be working toward 1) a dedicated revenue stream for parks and rec (see Charleston County’s great ambitious greenbelt example) and 2) annexation, and initiating 3) the move toward a public bank (whether city, county, or state) by way of loose coordination and advice from the Public Banking Institute. Tangible goals would be to include the quality of life in many ways, while the financial end result could mean a doubling of public revenue, coupled with a geographic expansion of Morgantown bringing zoning that would greatly improve the public’s capacity to manage development and to protect green space and to improve quality of life.

The financials should show that public banking would be a tremendous revenue and cultural boon to the city/county/state governments and to the public: residents, small businesses, students, non-profits and so on.

Legalities would  need to be worked through but seems practicable. The state would need to pass law to create a state bank or investment council. PBI seems to think that Morgantown or Monongalia County should be able to simply form a bank or investment council just as they form other revenue and operational entities, MUB for example.

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