Wednesday, January 15, 2014
Wednesday, November 6, 2013
Public Banking in Vermont
November 5, 2013
For Immediate Release
Contact: Matt Stannard
Development Director, Public Banking Institute
Public Bank of Vermont Could Create Thousands of Jobs, Save Millions of Dollars: Report
A report released yesterday by Vermonters for a New Economy concludes that a publicly-owned bank in Vermont could yield over 2,500 jobs in the state, add almost $200 million to the Gross State Product and over $300 million in state output, and save the state “close to $100 million in interest costs.”
The results of the report led Vermont State Sen. Anthony Pollina to announce today that he will be filing legislation this session that would give the Vermont Economic Development Authority a banking license. Such a bank would, according to Vermonters for a New Economy, “enable Vermont to keep our taxpayer dollars in Vermont, working for our economy.”
Vermonters for a New Economy commissioned the report from the Political Economy Research Institute, an independent unit of the University of Massachusetts, Amherst, with close ties to the school's Department of Economics.
The study demonstrates that public goods can be funded without putting governments in debt to private lenders with outlandishly high interest rates, says Marc Armstrong, Executive Director of the Public Banking Institute, a nonpartisan group devoted to education and advocacy on publicly-owned banks. “Vermont is already in the banking business with the extensive loan programs in place at the Vermont Economic Development Authority (VEDA), Vermont Housing Finance Agency (VHFA), and the Vermont Student Assistance Corporation (VSAC),” Armstrong said. “This study confirms the merits of funding these same loans with inexpensive bank credit, something only available to licensed banks.” The report points out that the new credit generated by the bank would be at low cost to the state because a public bank does not need to sell bonds to borrow money.
Public banking advocates argue that democratically-run, publicly-owned banks avoid the diversion of public money and private deposits into speculative instruments and foreign industries that compete with domestic industries, and avoid high interest rates in the financing of public services. The Bank of North Dakota, the only state-owned bank in the continental United States, was founded in 1919 and has been profitable every year since 1971. In 2012, BND set a new profit record for the ninth straight year, making $81.6 million in profits in 2012. Return on Equity was 17.6% and its assets grew 14% -- to almost $6.2 billion. During the 2008 economic crisis, North Dakota had its largest budget surplus in state history.
Armstrong believes the study also demonstrates that public reliance on private sector banking is “wasteful,” because it places taxpayer money into private banks, only to be borrowed back at higher rates. “This is like lending your snow blower to your neighbor, only to have your neighbor charge you when you want it back,” Armstrong said.
On Friday, November 8, Vermonters for a New Economy will hold a roundtable discussion on the results of the study, at the North Branch Winery, in Montpelier, at noon eastern time.
Supporters of public banking are currently launching a Friends of Public Banking campaign with a goal of creating public banks in all fifty states in the U.S.
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Wednesday, October 9, 2013
Tuesday, July 23, 2013
Some of you are adverse to any type of regulation at all. That is well known and has been since the Town’s birth well over 200 years ago. Your existing concept of private property rights was the prevailing law in an agricultural-based economy that pretty much disappeared from the Town of Amity at the time that the Court House was built on the hill in the early 1970s. The Town of Amity’s economic base is no longer primarily invested in agriculture. Parts of it still remain; however, what does remain is being consumed by larger agricultural conglomerates or corporate farming if you will.
There are very few small dairy cattle operations or chicken or pig farms in the Town any more. The Town’s economy is now steeped in a service economy or providing services largely involved in retail, food and hospitality. It is quickly becoming a bedroom community for Buffalo and Rochester full of second residences with part-time residents.
The current proposal for a site plan review law did not incorporate what you think of as conventional zoning and the rumors circulated with this assumption were flat out incorrect. Site plan review simply curtails the impact of land uses on adjacent properties. What site plan review does is regulate design aspects to comply with what are already common requirements for development in some state statutes or nuisance violations. It is NOT zoning.
More importantly, the site plan review law was for new development only and did not apply to residential development or your existing homes. The standards are intended to protect common public health and safety issues that could arise from new development like on-site septic and sewer or the ability to not overload existing water resources, or visual pollution form Las Vegas style signs, noise or odors that could potentially cause peace disturbances and soil erosion that could wash away your neighbor’s driveway. The law was simple common sense solutions as any industrial or large commercial impact could and would cost the existing residents more in the form of taxes to mitigate those impacts down the road. Under NYS Town Law, there is even the ability to waive any requirements as the board sees as making common sense.
The proposed law was forward thinking planning for potential high impact development resulting from future gas drilling and its onslaught of workers and their families coming from out of town. In fact, the law was actually minimal in regulation and very flexible. This is not seasonal and temporary hunters coming in for deer season. These are workers and their families coming from who knows where and staying for a long time.
The Town is hardly prepared for the gas fracking bust and boom. You might like it at first. But I am certain that you are not going to like it when it starts to overwhelm services that the town provides. What you have to ask yourself is this: Should you want to prepare (be proactive) at least something in case or do you want to react after the fact when it is too late?
Tuesday, July 2, 2013
Monday, July 1, 2013
Wednesday, June 19, 2013
Buffalo, NY---Recently, Texas Governor Rick Perry came to poach New York State jobs. Governor Cuomo responded that his own Tax Free NY is a far superior alternative.
In 2012,NYS ranked third among the nation’s top ten for Gross Domestic Product (GDP) and ranked fourth highest in per capita income (PCI) according to the Bureau of Economic Analysis. The two economic indicators are lost on critics complaining of high taxes in New York.
Comparatively, New York’s tax system has a close-to-flat tax structure overall accounting for income, property, sales and excisetaxes. NYS manages to achieve one of the least regressive tax systems in the nation. Yet still, poor and middle income families in New York pay a higher share of their income towards taxes than wealthy families do. Therefore, NYS has comparatively high combined state and local taxes for poor and middle income families.
States that are revered for their “low” taxes are enormously high tax states for poor and middle-income families. The Institute on Taxation & Economic Policy (ITEP) verifies the ten states that have the highest taxes on the poor: Arizona, Arkansas, Florida, Hawaii, Illinois, Indiana, Pennsylvania, Rhode Island, Texas, and Washington.
In 1936, Mississippi pioneered public subsidization to industrialize the nation’s poorest state. The Depression had accentuatedMississippi’s poverty because of stubborn reliance on a colonial agrarian economic structure. Governor Hugh White’s proposal involved tax exempt bond financing backed by tax revenue forbuilding construction and land purchases to attract industries. The pitch included buildings and land leased at submarket rates along with cheap abundant labor (e.g., ex-sharecroppers). Ironically,critics protested calling the scheme "Socialism.”
Virtually unconstitutional in every state, each created amendmentsto circumvent the law and the practice spread widely despiteresulting low economic growth. When subsidies expired, companies demanded more in order to retain jobs. If demands were not met, then they closed up shop in search of the next big give-away.
There are over five decades of overwhelming evidence establishing the illegitimacy of this practice. Public subsidies DO NOT generate economic growth or jobs as claimed. What we have learned issimple. Subsidization of business buys a "payroll" through a lien onproperty. Tax increases are certain for average taxpayers in order to finance Tax Free NY.
Tax Free NY is the "decisive" race to the bottom. It does not create “new jobs”. It moves another state’s jobs to the Tax Free zone until the subsidy expires (e.g. IBM). The College of Nanoscale Science and Engineering is prescriptive. The lack of quaking economic growth in Albany-Schenectady-Troy, NY Metropolitan StatisticalArea does not justify replicating this model throughout the state.
It is incongruous to hype an unfriendly business climate in NYSbecause of high taxes and then increase taxes for the average taxpayer so that a privileged few can pay nothing in a Tax Free zone.