A State Owned Public Co-operative Bank, Review of SB5995, Washington Investment Trust

1. A State Owned Public Co-operative Bank,Review of SB5995, Washington Investment Trust The bill sponsors: Hasegawa, Das, Nguyen, Van De Wege, Keiser, Conway, Saldana, Billig, Darnelle, Takko, Liias, and Hunt Apr. 2019 Public Bank (PB) Caucus Presentation LWV Washington PB Task Force

2. Mission of the Taskforce • Conduct a critical review of public bank concepts, focusing on: • SB5995, which would create the Washington Investment Trust (WIT) • Legislature commissioned public bank studies • Other existing studies of public banks. • After careful review, the Task Force will recommend that the state league board either support, not support or take no position on public banking in Washington State.

3. Why is a state owned public bank being considered? • Bonded debt costs Washington State taxpayers twice as much as the original amount borrowed. • Our state debt has reached the constitutional limit. • Interest on the debt being paid out of the general fund reduces our ability to pay for other programs.

4. What are Public Banks? (Video) (The viedo link) Introduction to state owned banksby In Context, a program at Pacifica affiliate WPKN 89.5 FM, Bridgeport, CT. “The concept is simple: The public bank uses state funds on deposit as bank reserves for making loans for infrastructure and other projects to Improve the state's economy and grow jobs.”

5. Washington Investment Trust Q&A What is the Washington Investment Trust proposed in SB 5995 in 2019? Who will oversee the WIT? How would the WIT function differently from the use of a private banks account? What benefits will public banking bring to the people of Washington? What are opposing views of establishing a public banking institution If SB 5995 is passed in it’s current form, when will the WIT be in full effect?

6. The Washington Investment Trust is a public depository for state money or funds and is authorized to manage and invest state money to facilitate infrastructure development programs. It does not accept funds from or dispense to ordinary citizensor private businesses (see WA state Constitution in the slide 17) • It’s also named as a state co-operative public bank and accepts public funds from WA municipalities and their political subdivisions. • WIT, unlike a commercial bank, would be owned by the people of Washington State and all proceeds would go back into the state general fund for Washington State infrastructure systems (1). What is the Washington Investment Trust?

7. 2. Who will oversee the WIT? • A commission, comprised of 5 elected officials, will be the primary governing body. • Governor • Lieutenant Governor • Attorney General • State Treasurer • State Auditor • The commission appoints the Trust president and 11 advisory board members.

8. 3. How would the WIT function differently from the use of private bank accounts ? Currently, commercial banks lend Washington State large amounts of money to fund state infrastructure programs, and the State is expected to pay back this money with interest. If the WIT were the lender instead, the interest accrued could go directly back to the State in the form of income, rather than expense.

9. 4. What benefits will WIT bring to the people of Washington? • WIT would increase public financing capacity by utilizing produced revenue without raising taxes. • It would enable comprehensive economic development • It would enable the state to approach public infrastructure needs with a long-term perspective • It would take some of the guesswork out of the lending/borrowing actions taken.

10. 5. What are opposing views to establishing a public banking institution? • Legal/Constitutional barriers • State programs already exist for similar purposes • Risk of political influence on use of taxpayer dollars • Associated costs are too high

11. 6. If SB 5995 is passed in its current form, when will the WIT be in full effect? • SB 5995 did not pass in legislative session 2019 • Stated proposed establishment date as July 2020 if passed • If timeline remains the same, and it were passed in session 2020, we could expect the WIT to be fully established in July 2021.

12. WA State Constitution IN REGARD TO PUBLIC FUNDS, ITS FULL FAITH CREDIT and DEBT… ARTICLE VII SECTION 5. CREDIT NOT TO BE LOANED The credit of the state shall not, in any manner be given or loaned to, or in aid of, any individual, association, company or corporation. (Page 34)

13. Questions and Comments Please send your question or comment on the proposed WA state owned public bank to: Adele Reynolds, adelereynolds@netscape.net or Toyoko Tsukuda, toyoko.lwvwa@gmail.com of LWV of Washington Public Task Force