Reply #17: Writeup on the Progressive States blog

[eridani]

http://progressivestates.org/node/26273#article3

At the basic level, a development bank is capitalized by state money, publicly governed, can serve as a depository for state revenue, and returns a portion of its profits to the state. Rather than sending state funds to big banks, the development bank would keep deposits in-state. As such, a development bank reduces state dependence on large financial corporations and allows states to invest dollars in local communities rather than line the pockets of Wall Street CEOs.

A development bank would also be a source of job creation. The Center for State Innovation finds that such a bank could create or save up to 13,500 small business jobs in Oregon - about 6,700 of which would be supported by the augmented loan activity and ability to invest in local industry that the bank would permit. It would also increase state revenues. In 2009, the Bank of North Dakota “delivered a $30 million dividend to the state.” Interestingly, North Dakota has one of the lowest unemployment rates in the country and is one of the states with a budget surplus in recent years.

Messaging: Recent polling indicates strong public and small business support for a development bank. In Maryland, people were asked, "The state of Maryland keeps billions in tax dollars in big out-of-state banks like Bank of America and M&T. Would you favor or oppose the state using these funds to create a public bank that will keep Maryland tax dollars at home, create more local jobs and support local banks that provide credit to small businesses in Maryland?" In total, 67 percent of respondents favored the idea, with 42 percent strongly favoring the policy. Further, MSA polling found that 75 percent of small businesses polled would support the creation of an Oregon state bank like North Dakota’s.