The Coalition to Keep Berkeley Money Local is working to bring the first public bank in California history to the East Bay. In partnership with Public Bank East Bay, the group has gathered thousands of signatures in an effort to place a measure on Berkeley’s November ballot.
A public bank is a government-owned institution that manages public funds such as tax money, and loans money out to support community-facing projects, including affordable housing, clean energy and small businesses.
“Everybody wants their tax money to be spent locally on things their community cares about, rather than spent globally on whatever makes bankers rich,” said Debbie Notkin, chair of Public Bank East Bay’s board of directors.
The ballot measure would levy a temporary six-year tax on Berkeley residents to fund the bank’s founding. If approved, it would impose a tax of $0.06 per square foot on dwelling units and a $0.09 per square foot on other properties.
According to Notkin, an advantage of public banks is that they do not have to pay “enormous” interest to big banks, and communities have some control over how tax money is invested and spent.
If capitalized, Public Bank East Bay would not offer retail services or accounts to individuals to keep overhead and interest rates low.
“It’s figuring out how to make taxes go a little further and how to fund the programs that people want instead of paying debt service fees to Wall Street bankers and shareholders,” said Julian LaRosa, field director for the ballot measure. “We can keep that mobile and going back to the people that banks should actually serve.”
While being publicly owned, Public Bank East Bay would not be operated entirely by participating regional governments. Instead, it would be run by professional bankers and regulated by the state and federal governments. The city would hold seats on the board of directors and have influence over loan policy.
While public banks are uncommon in the U.S., Notkin pointed to the Bank of North Dakota as a notable exception. As the only state-owned bank in the country, it protected the state from the 2008 financial crisis and the COVID-19 pandemic and returns 15% annually.
A key component of Public Bank East Bay would be enabling local governments to pursue projects they typically would not be able to undertake, including building more affordable housing.
“There’s always families up and down the East Bay, San Francisco, all over the map, they’re losing their homes. There’s a shortage, there’s a thousand stories a year of the crisis we’re facing,” LaRosa said. “A public bank is a viable tool in being able to help build a foundation that can stop that.”
LaRosa said the ballot measure is intended as a “pilot project” that would begin raising funds in Berkeley before expanding to other cities.
While not on the ballot yet, the Coalition to Keep Berkeley Money Local and Public Bank East Bay will find out in July if its measure makes it on the November ballot.