Berkeley Measure Z would fund public bank through parcel tax | City Government

Measure Z, which would create a parcel tax to fund a public bank in the city of Berkeley, is on the ballot this November.

The measure would impose a six-year parcel tax on Berkeley property owners. The city would tax residential properties up to $0.06 per square foot of improvements and nonresidential properties up to $0.09 per square foot of improvements in their first year. The rate would then increase in subsequent years.

Revenue generated from the tax will go into a fund to support Public Bank East Bay. The bank would lend to and accept deposits from local municipalities and institutions aligned with three priorities: affordable housing, clean energy and small businesses.

The Measure Z tax would be a short-term investment. In the long term, the bank is intended to be self-funded.

According to Aaryaman “Sunny” Singhal, a board member for PBEB and a UC Berkeley graduate student, the bank is a “low-cost model.” PBEB would be a nonprofit and lend to institutions rather than individuals, so the bank would likely be able to provide loans at interest rates lower than those of typical private banks, Singhal said.

Private banks tend to finance larger entities, whereas PBEB would help finance small businesses that may otherwise struggle to obtain a loan, Singhal said.

Singhal noted that the bank would be owned by the city of Berkeley, but it would serve the broader Bay Area.

“This makes it a win-win to lend to neighboring cities,” Singhal said in a text message. “They get lower costs for things like housing, and Berkeley gets an ongoing profit that can be reinvested in the city.”

Singhal added that Berkeley residents could leverage public ownership to ensure PBEB remains aligned with community-oriented goals, promoting greater accountability. The bank would also hold open board meetings.

PBEB is modeled after the Bank of North Dakota, a public bank that is more than a century old.

The Bank of North Dakota, which serves about 800,000 people, reported a net income of more than $230 million last year.

“Imagine what Berkeley could invest in with those types of returns,” Singhal wrote in a text message.

Measure Z has received endorsements from State Sen. and former Berkeley mayor Jesse Arreguín, as well as Berkeley City Council members Ben Bartlett, Brent Blackaby, Cecilia Lunaparra, Terry Taplin and Igor Tregub. Mayor Adena Ishii said in an email that she is not taking a position on the measure.

District 7 city council candidates Syrak Micael and Aidan Hill both expressed support for the measure.

Hill told The Daily Californian a focus of theirs is stabilizing small businesses amid fluctuation in the student population throughout the year, which creates a dip in local business during the winter and summer months.

“I would do my best to ensure that that money goes towards a recovery program for specifically the off-seasons,” Hill said.

Micael said PBEB would allegedly shift creditor profits away from corporate banks that fund fossil fuels and genocide, toward community reinvestment.

“A public bank means it’s a public economy, an economy for working people, an economy for students,” Micael said.