\u201cWe\u2019re in a moment now where our cities are being asked to do more,\u201d said Trinity Tran, executive director of the California Public Banking Alliance<\/a>. \u201cWith volatility at the federal level, municipalities across the country are facing widening budget deficits while urgent needs, from housing to climate resilience, remain underfunded.\u201d<\/p>\n Public banks are financial institutions owned by government entities, such as a city, county, or state, that manage public funds and reinvest them in public priorities. Unlike private banks, which are driven by shareholder profit, such banks serve the public interest by using public dollars to finance projects such as clean energy, small business support, and long-term community development.<\/p>\n Supporters say the model offers cities a way to stretch limited resources as local governments confront rising costs and uncertain federal support.<\/p>\n \u201cThe question isn\u2019t just is there enough money,\u201d Tran said. \u201cThe question is who decides where our common dollars go today, how they\u2019re used, and whether they stay in communities and benefit our localities, or [whether] they keep getting signed out to private institutions that don\u2019t answer to our communities.\u201d<\/p>\n Cities often pay millions of dollars annually to private financial institutions to manage public funds and long-term debt. Tran pointed to Los Angeles, where the city pays about $1.4 billion in debt service each year, including hundreds of millions in fees to major banks.<\/p>\n Public banking advocates argue that instead of sending away those dollars, cities could recapture them and reinvest locally.<\/p>\n \u201cWe are able to recycle our public dollars, reinvest them year after year, and maximize their impact,\u201d Tran said.<\/p>\n Finland, consistently ranked among the world\u2019s happiest countries, is one of several that use public banking systems to support housing, infrastructure, and long-term community investment. Nations including Germany, Brazil, and Costa Rica have long relied on publicly owned financial institutions to fund local development, support economies, and keep public dollars circulating within communities.<\/p>\n However, in the United States, public banking remains rare. The Bank of North Dakota<\/a>, founded more than a century ago, is the nation\u2019s only state-owned public bank, and advocates often point to its sustained stability as proof the model can succeed. The century-old institution has remained profitable for decades, returned significant profits to the state, and helped stabilize local lending during economic downturns.<\/p>\n California has become recognized as a national leader in the modern public banking movement. At least 10 cities and regions across the state have active public banking campaigns, including San Francisco, Los Angeles, the East Bay, and Sacramento.<\/p>\n Sacramento formally entered the conversation in 2019 when the city authorized exploration of a public bank amid growing interest statewide.<\/p>\n Former Sacramento City Councilmember Katie Valenzuela said the idea gained momentum as residents and community groups questioned whether the city\u2019s financial system served everyone fairly.<\/p>\n \u201cIt really isn\u2019t fair to the public,\u201d Valenzuela said. \u201cIt\u2019s about who can call the mayor or who can call a councilmember to get access to our capital.\u201d<\/p>\n Valenzuela argued Sacramento already manages significant public assets, including utilities and long-term infrastructure funds, that could be leveraged to strengthen the local economy and build resilience.<\/p>\n Despite early enthusiasm, Sacramento\u2019s effort slowed after the initial feasibility work began.<\/p>\n The City Council approved funding to explore the concept, authorizing $50,000 to begin the process. Consultants responded with proposals detailing what a Sacramento public bank could look like, but moving beyond the study phase proved difficult.<\/p>\n Valenzuela said the project became stuck in city bureaucracy.<\/p>\n As other crises emerged, including the pandemic, elections, and competing city priorities, the proposal was deprioritized. She suggested renewed public attention could help restart the effort.<\/p>\n \u201cEvents like this get attention,\u201d she said, pointing to community organizing as a key driver of momentum.<\/p>\n For some advocates, public banking is not only a financial tool but also a public health strategy.<\/p>\n Dr. Flojaune Cofer, an epidemiologist and progressive organizer, described public banks as part of the infrastructure that determines whether communities thrive.<\/p>\n \u201cThe strongest drivers of health are not the 15 minutes you spend with your health care provider,\u201d Cofer said. \u201cIt\u2019s everything else happening in your community: housing stability, income security, safe neighborhoods.\u201d<\/p>\n Life expectancy in California can vary by nearly 20 years across ZIP codes, reflecting decades of disinvestment.<\/p>\n \u201cWhen we have resilient communities, we are healthier, we live longer lives,\u201d she said. \u201cDecisions that are made in our communities really are critical decisions.\u201d<\/p>\n Advocates say the push for public banking is no longer simply theoretical. Lawmakers and organizers are now focused on what comes next.<\/p>\n One proposal outlined at the Sacramento town hall calls for California to take a phased approach by expanding the state\u2019s Infrastructure and Economic Development Bank, known as IBank, into a full state depository institution.<\/p>\n Under the plan, the first phase would broaden IBank\u2019s lending authority and create pilot financing programs for priorities such as affordable housing, climate resilience, and small business support, focusing on disadvantaged and environmental justice communities. The proposal also recommends establishing a state bank commission led by the governor, treasurer, and controller.<\/p>\n A second phase would require the state to contract with independent experts to develop an expansion plan and seek public input through hearings within the first year. The plan would address long-term governance, deposit protections, and capitalization options, striving to complete a five-year business model within 18 months.<\/p>\n The final phase would involve formally chartering and launching the state bank, appointing a governing board, and pursuing access to federal banking systems.Organizers are starting with a community call to action, which can be accessed at bit.ly\/sacpb<\/a>.<\/p>\n \n\tRelated<\/p>\n","protected":false},"excerpt":{"rendered":"What if the money cities spend on interest and banking fees were reinvested in their communities? That question…\n","protected":false},"author":2,"featured_media":173221,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[32],"tags":[912,9464,121,123,122],"class_list":{"0":"post-173220","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-sacramento","8":"tag-carousel","9":"tag-dr-flojaune-cofer","10":"tag-sacramento","11":"tag-sacramento-headlines","12":"tag-sacramento-news"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/173220","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=173220"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/173220\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/173221"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=173220"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=173220"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=173220"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"California](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/02\/B27A6593.jpg\")
California Public Banking Alliance Executive Director Trinity Tran greets town hall members. Douglas Carter, OBSERVER<\/p>\n![\"Dr.](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/02\/B27A6598.jpg\")
Dr. Flojaune Cofer, left, and former Sacramento City Councilmember Katie Valenzuela listen to public comments at the town hall. Douglas Carter, OBSERVER<\/p>\n