On 28 January, there was a hearing on the creation of the Washington Investment Trust (SB 5995), before the WA State Senate Financial Institutions, Economic Development & Trade Committee (11:50 to 47:55 on the video counter). More widely known under the rubric of a public banking bill, the trust would be created to “serve as a depository for state monies and federal transportation funds and is authorized to manage and invest state monies in order to facilitate financing and construction of new and existing public infrastructure systems.” (See Senate Bill Report on SB5995).
Unfortunately, a business plan, for which the state appropriated monies well in advance, (several hundred thousand dollars) has yet to appear. The responsible organization for developing this plan, the Evans School of Public Policy and Government (University of Washington) had a deadline of June 2019 to complete the study, but almost 8 months later, still no product. I have asked Sen. Hasegawa’s office about the nature of the delay but have not as yet heard back.
Without the plan, opponents continue to attack the general concept with impunity since the specifics of setting up and running the bank have yet to appear. So, with each hearing on the bill such as the one on the 28th, a parade of naysayers expound on the legislation without knowing specifics, all the while spreading FUD.* This is not to say that there are no legitimate concerns that must be addressed before the bill’s passage, but some of the concerns border on the ridiculous (Washington State Treasurer Gaslighting on Public Banking). In a similar vein, Brad Tower, who lobbies for the Community Bankers of Washington continues to trot out a minimally relevant 2006 International Monetary Fund (IMF) report that he claims demonstrates serious problems with the German public banking system. (See the report at link below.) He has chosen this report, he tells me with a straight face, because in 2006 the economy was in good shape. One speaker, representing the pension funds of the state, had some legitimate concerns that the laws governing pension funds might prohibit placing funds in a public bank. These are conflicts that can be worked through with diligence by legislators.
One bright spot is that the Bellingham City Council approved moving ahead with a resolution to support public banking in Washington during its meeting on December 16th. The Whatcom County Council and the Bellingham Port Commission should follow suit.
*FUD - Fear, Uncertainty and Doubt